Hello fellow BP Investors! I am looking at investing out of state. I currently live in Glendora, CA. Is there any investors out there that are investing out of state that would give me some place to start? I want to know what to look for in a market to know it will be a good investment. Any help will extremely appreciated. 

@Jose Martinez I have invested out of state, and the first thing I would look for is an area where you won't mind visiting often. Find a good rental market where you have family or friends, because you will be there at minimum a half dozen times per year. Also, depending on the scale of the project you may want to have someone to help you with some of the smaller property management details unless you are buying apartments, etc. 

I am a Chicago investor, but I chose the South Bend, Indiana market. I did this because I have a cousin there who I can catch up with, and because it is under a three hour drive. Once I chose the market, I focused on the broker relationships and spent a few days getting to know the market. 

After you find a property you are interested in, I think the next thing to focus on is your property management strategy. I manage my own properties in Berwyn and Lyons, but handling a property out of state is too much (even if it is only three hours). The management company will literally make or break your investment for you, so choose wisely. 

Hope that helps! 

@John Warren thx for the adivice! One question, when you say get to know the market, what are some indicators for a good market that I should be looking for? I would love to know what to look for to find a “good” market.

Thanks!

@Jose Martinez

Two key components to succeeding in out of state investing are to have a good team in place in your area AND in the state you are investing in. I would attend various REI meetings and try to find someone who has invested out of state successfully. Learn from an experienced investor a bit before dipping in.

@Jose Martinez for rental property I like to know what the vacancy rate will likely be. For instance, vacancies are typically around 3-5% in Berwyn and Forest Park where I do a lot of business.  In South Bend where my 20 unit is located, the vacancy factor can easily climb over 10%. This is a lot more significant than it sounds when you are turning those units through a property manager. Everything adds up!

Other market factors I look for would be desirability. For instance, the areas I am investing in here in the Chicago southwest suburbs are highly desirable due to proximity to the Chicago down town, jobs, amenities, etc. If the area you are looking to invest in has never heard of a Starbucks (much less finer dining options!),  you know it will not be as desirable as areas that are near large metro areas with tons of things that add to quality of life. 

Of course, you can make a lot of money in sleepier areas. It is definitely hard to quantify quickly in a short post what I think makes a great area. Hopefully others can chime as well. 

Well first, it depends on what kind of investing you are trying to do. Flipping vs. rental properties will send you to different states (potentially). I have always done rental properties, so anything I say is more towards those and not towards flipping.

Here's a couple articles that might kick-start your brain juices-

https://www.biggerpockets.com/renewsblog/out-of-st...

https://www.biggerpockets.com/renewsblog/2014/02/2...

Happy to answer any questions you have. And I'm almost your neighbor! I'm in Venice. SoCal neighbor, at least.

I know I am a year late to this thread but the 2 articles @Ali Boone are great as I begin my research in investing in out of state markets. Thank you! I am also a SoCal neighbor, in West Covina. 

@Angelica Morales -- Welcome to BiggerPockets!

Nice to see another SoCal neighbor here on BP. :)

As you know prices in most of California are high and not ideal for buy-and-hold real estate investors. In addition to the fact that the rent-to-price ratios are very low compared to many other markets around the U.S.  That's why many investors choose other markets in other states, as I did as far back as 2004.

What markets are you considering?

Continued success!

Originally posted by @Angelica Morales :

I know I am a year late to this thread but the 2 articles @Ali Boone are great as I begin my research in investing in out of state markets. Thank you! I am also a SoCal neighbor, in West Covina. 

Oh nice! I drive through W. Covina often going to Redlands where my parents live :) Glad the articles helped!

Anyone tried reading david greenes book on long distance investing

@Ali Boone oh nice. I’m in Redlands. Beginning my investing in Chicago.

@Marco Santarelli I am currently looking at the Carolinas and Tallahassee.  Do you have any markets that you might recommend? Yes, as much as I would like to invest in my hometown the numbers just don't make sense, I'm glad a fellow BP'er can agree. (Means I'm learning!) 

@Yosef Katz I am currently reading the book along with a few more. Do you have experience in long-distance real estate or looking to venture outside of your market?

Originally posted by @Angelica Morales :

@Marco Santarelli I am currently looking at the Carolinas and Tallahassee.  Do you have any markets that you might recommend? Yes, as much as I would like to invest in my hometown the numbers just don't make sense, I'm glad a fellow BP'er can agree. (Means I'm learning!) 

@Yosef Katz I am currently reading the book along with a few more. Do you have experience in long-distance real estate or looking to venture outside of your market?

 I actually just recently purchased the book, I live in a very high market so I'm looking to venture outside I'm pretty new to this so Im wondering if anyone has got any feedback on this topic

@Jose Martinez

I Jose I'm from Los Angeles and I'm looking out of state as well the not having much luck with qualified commercial agent I'm looking for units in the Midwest and Florida that's my thoughts

@Angelica Morales

Me Too! I'm looking to leave Los Angeles and looking towards the Midwest and Florida

@Jose Martinez I’m in San Diego and am under contract on my first rental property. It’s in Pittsburgh. My two suggestions would be to read David Greene’s book on long distance investing and once you’ve found the market you want to be in find an agent that knows it well from and investor standpoint. For me, my wife had a friend who was an agent in Pittsburgh so it took some of the nerves out having a known contact. Check with friends who may know someone if you don’t know any personally and just start analyzing deals. Good luck!

@Jose Martinez in a market look for growth: population and employment. Also, favorable land lord laws. Favorable taxes. Also look for places where supply is constrained and/or the absorption rates of new units are high and understand what new supply is planned. Major cities will provide more of a margin for error as you have a large tenant pool and more diverse employment. Cities with a high proportion of steady jibs: government, education, and healthcare are usually good. I hope this helps get you started. Indianapolis has all of these characteristics. That’s where I invest. 

Originally posted by @Eric Harnden :

@Ali Boone oh nice. I’m in Redlands. Beginning my investing in Chicago.

Double oh nice! I love Redlands :)

Key in a good property manager. I wouldn’t recommend trying to manage yourself remotely. I have properties across four states and three countries. You need to manage your managing agents. Only buy where you can get value, which is difficult right now.

@Jose Martinez Kent Ritters post really nails what you need to look for in a market. You also want to have someone that is local that understands the market and neighborhoods. This will keep you up from buying in ruff areas. A good PM or boots on the ground will do wonders for you when investing out of state.