I live in Pasadena, CA but invest out-of-state because I like the idea of my properties cash-flowing and not having to rely on appreciation. I now purchase multiple properties a week but it was really hard getting to this point. These are some of the lesson's I've learnt along the way. What are some of the lesson's you've learnt along your journey?

1. Location - City
   • Start at a macro level and make sure your city has both long term and short-term job growth, population growth, low median home values, low days-on-market (DOM), good affordability index, and has a good overall rent-to-own ratio.
2. Location - Zip Code(s)
   • Fly out to the city, and check out the specific zip codes your looking to invest in. Things can look really good on paper but what do the neighborhoods actually look like. What does the crime rate look like, are new developments coming in or are people moving out? Are shops opening or closing. BTW, if you think $200 is too much to spend flying out to check out your potential location than you probably shouldn't be investing out-of-state to begin with.
3. Purchase Manager
   • You make your money when you buy and although homes do occasionally pop up on the MLS, the sure way to find a good deal is to market directly to home owners (via 1,000 different ways discussed in a 1,000 other places). Once you contact a home owner you'll need to go out and view the property and negotiate a price. This is where your purchase manager comes in. Finding a good purchase manager isn't easy but a few places to try. A new or part time real estate investor. Or when you plan your visit go during a regularly scheduled REI meetup. At the group announce what you're doing and ask if anyone would like to partner with you and be your "boots on the ground". DO NOT go in asking, go in offering something.
4. Contractor
   • Believe it or not finding a good contractor is one of the hardest things in the world to do. A good contractor friend of mine once told me, "you can get 2 of 3 things but never all 3 in a contractor. Price, speed, or quality. The reason it's so important to get a contractor even before getting your first house is you'll need to figure out what the rehab is going to cost you. Most mistakes are due to either over-valuating ARV or underpricing repairs. I started with an overpriced top of the line contractor but I don't regret it. Yes, I paid too much but they stuck to their price, didn't have any change orders, and did a great job.
5. Realtor
   • Although purchasing off-market and possibly holding long term, it's still important to build a relationship with a local realtor who knows the prices of homes inside and out. As mentioned before, make sure you have something to give in return. You can give them listing from not-so-motivated sellers, a flat fee for checking out a home. Going off on a little tangent but don't look for agents who offer BPOs. My experience has been BPOs are worth what you pay for them. Until you learn the market it's worth working with a top-notch realtor who can give you realistic ARV numbers.
6. Property Manage
   • For the same reason you need a good realtor to give you accurate ARV values you'll need a good property manager to give you accurate rent prices. When you make your trip to the local REI meeting ask everyone who they use and for recommendations
7. Local Bank
   • It's never too early to start building relationships with local community banks. However, be warned that community banks are just that, banks that service the community. Don't come in from out-of-state looking to start working with them right away. Rather start the relationship by saying, "Yes, I'm from out of state (try not to mention California in first conversation) but I'm here to setup up business, just wanted to introduce myself and let you know I'll be checking in periodically to tell you more about my business".
8. Mentor
   • This is not mandatory but is definitely worth its weight in gold. Find an established investor already working your target market and let them know what you plan on doing. Negotiate something like half the profit on the first 3 deals or something like that. Make it worth their while. Again, don't ask for something, see what you can give. If you can't find someone in your target area to work with then find someone in your state who invest where your looking to invest and try to partner with them. Bottom line, it's way easier doing it with an experienced investor, no sense re-inventing the wheel.
9. Flexibility
   • No two markets are alike and real estate investing needs to be fluid. Don't come in with a plan that your unwilling to change, rather be flexible and willing to work with local market conditions. For example, if you are originally looking for 3/2 but find that everyone in your market really want 4/2s than adjust accordingly. Talk to different property management companies and find out what's in high demand and what to stay away from. Find a strategy that works in the local market.
10. Perseverance
    • So many folks from out-of-state come in with lots of cash, blow it on overpriced homes, lose money, leave, and think it was just "a bad market" or "there was too much competition". Real estate investing works but not without perseverance.  Be prepared to fail but don't quit, get back up and try again.  You will succeed (as long as you start).