Is a MLO on an out of state property a bad idea?

4 Replies

I've recently been looking for properties that I could potentially purchase using an MLO. I currently reside in Southern California where, as you probably know, Real Estate prices are through the roof. This has driven me to look into neighboring states such as Arizona and Nevada for investment opportunities. The deals in these states are much better and give me a better opportunity to cash flow. What would be the potential negatives of leasing an out-of state property? Is it too risky?

@Julian Hicks

Probably your main consideration when investing in real estate in another state is to be familiar with that state's tenant and landlord laws.

What you don't know CAN hurt you. So do your due diligence and make sure that the strategy you know works in California will work in other states as well.

If you don't know the area, here's what you'll need:

  • A local real estate agent
  • A loan officer licensed to originate loans in that state
  • A local property manager (they should have repairmen, contractors, etc. contacts for you)

It works best when you have local "boots on the ground" so to speak, meaning friends or family members who can keep an eye on the property for you... which your property manager can do for you, but for a fee.

I would recommend reading BiggerPocket's book on long distance real estate investing for a ton of other tips as well: https://www.biggerpockets.com/store/long-distance-real-estate-investing-ultimate

If you have any questions about the Phoenix Metro Area market when you're considering which area to invest in, feel free to reach out and I'll try to get your questions answered or point you in the right direction!

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