New Re-intro for Out of State Investing
Member since 2019 · 23 posts · 11 votes
New Re-intro for Out of State Investing
Most Popular Reply
Melissa JusticeBusiness Member
Rental Property Investor · Phoenix, AZ · Member since 2024 · 519 posts · 1k+ votesThanks for sharing and you are absolutely not alone! Life happens, and the fact that you’re still here, still learning, and now ready to re-engage says a lot about your drive and commitment.
Quick perspective on your situation:
* You’ve done something most people haven’t - taken initiative by signing up for a bootcamp and starting the education process.
* Being in a high-cost-of-living (HCOL) area like North Jersey (I'm actually from Morris County originally) makes out-of-state investing a smart and often necessary move.
* Wanting a connection to your market is totally natural, but don’t let it paralyze your momentum. Sometimes the best connection is a great team on the ground.
A few tips to move past the analysis paralysis:
Pick 2–3 markets to compare side by side - look for landlord-friendly states, low property taxes, population growth, and strong rental demand.
Consider turnkey rentals in the Midwest or Southeast - they’re great for beginners, can offer solid cash flow, and come with built-in property management.
You don’t have to marry a market forever. Choose one that feels 70% right and start building familiarity and team connections there.
Since you're from North Jersey, you’re in great company - many investors from the tri-state area buy in places like Birmingham, AL, Indianapolis, IN, Cleveland, OH, Augusta or Macon, GA, Memphis, TN, etc.
These areas have low price points, strong rent-to-price ratios, and turnkey options with vetted local teams, which is key when you're investing from afar.
You might be surprised how many North Jersey folks are already investing out of state. Put the feelers out in FB groups, BP forums, or at local REIAs or even DM a few people who post about it. You’ll find your people quicker than you think.
You’re back in the game - now it’s just about taking small, intentional steps. You've got this! Let me know if you'd like help comparing markets or analyzing a deal.
Best of luck,
Melissa
9 Replies
- 1yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
can you stay a couple hours away so you can still be hands-on / in person?
buying a random property thousands of miles away won't do anything for you.
- Member since 2019 · 23 posts · 11 votes1y
Potentially - I was also considering a location where I can still drive to - but is further afield.
- 1yMelissa JusticeBusiness MemberRental Property Investor · Phoenix, AZ · Member since 2024 · 519 posts · 1k+ votes
Thanks for sharing and you are absolutely not alone! Life happens, and the fact that you’re still here, still learning, and now ready to re-engage says a lot about your drive and commitment.
Quick perspective on your situation:
* You’ve done something most people haven’t - taken initiative by signing up for a bootcamp and starting the education process.
* Being in a high-cost-of-living (HCOL) area like North Jersey (I'm actually from Morris County originally) makes out-of-state investing a smart and often necessary move.
* Wanting a connection to your market is totally natural, but don’t let it paralyze your momentum. Sometimes the best connection is a great team on the ground.
A few tips to move past the analysis paralysis:
Pick 2–3 markets to compare side by side - look for landlord-friendly states, low property taxes, population growth, and strong rental demand.
Consider turnkey rentals in the Midwest or Southeast - they’re great for beginners, can offer solid cash flow, and come with built-in property management.
You don’t have to marry a market forever. Choose one that feels 70% right and start building familiarity and team connections there.
Since you're from North Jersey, you’re in great company - many investors from the tri-state area buy in places like Birmingham, AL, Indianapolis, IN, Cleveland, OH, Augusta or Macon, GA, Memphis, TN, etc.
These areas have low price points, strong rent-to-price ratios, and turnkey options with vetted local teams, which is key when you're investing from afar.
You might be surprised how many North Jersey folks are already investing out of state. Put the feelers out in FB groups, BP forums, or at local REIAs or even DM a few people who post about it. You’ll find your people quicker than you think.
You’re back in the game - now it’s just about taking small, intentional steps. You've got this! Let me know if you'd like help comparing markets or analyzing a deal.Best of luck,
Melissa
- 1yBernice RetzloffPro MemberMemphis, TN · Member since 2024 · 234 posts · 100 votes
Hey @Laurence Fru!
Totally get it, life happens, but it’s great that you’re jumping back in and exploring out-of-state investing. Coming from a high-cost area like North Jersey, looking elsewhere for long-term rentals makes a ton of sense, especially if cash flow is the goal. A lot of investors in your shoes are having success in places like Memphis, where properties are still affordable (often under $150K), rents are strong, and there are solid local teams that handle everything for you. Even if you don’t have a personal connection to the area, building a reliable team on the ground is what really makes it work. And trust me, you’re not alone in the overanalyzing. It’s normal when you’re trying to make your first move smart. If you ever want to talk through how others from Jersey are making it happen out of state, happy to share some insight! - 1yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
@Laurence Fru here's our standard copy & paste info about OOS investing:
Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location/neighborhoods to invest in.
Why is Property Class so important for investors to understand and apply in their investing strategies?
Because the Property Class dictates the Class of the tenant pool that the property will attract.
The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.
Both Property Class and Tenant Class affect what type of contractors, handymen and property management companies will work on a property.
If you buy & renovate a property in Class D area to Class A standards, what Tenant Class will rent it?
Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?
So, if you fail to apply the correct assumptions to a property, your expectations won’t be met and it may even be a financial disaster.
We use the following to rank Property Classes, in order of importance:
- Property Tenant Pool: closely linked to location, but not always.
- Property Location: closely linked to tenant pool, but not always.
- Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”
Key metrics for each Property Class:
Class A Properties:
Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
Tenant Default: 0-5% probability of eviction or early lease termination.
Section 8: Class A rents are too high and won’t be approved.
Vacancies: 5-10%, depending on market conditions.
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Class B Properties:
Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
Tenant Default: 5-10% probability of eviction or early lease termination.
Vacancies: 10-15%, depending on market conditions.
Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
Section 8: Class B rents are usually too high for the Section 8 program.Class C Properties:
Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
Tenant Default: 10-20% probability of eviction or early lease termination.
Section 8: Class C rents usually meet program requirements, proper screening still recommended.
Vacancies: 10-20%, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.
Class D Properties:
Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
Tenant Default: 20-30% probability of eviction or early lease termination.Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
Vacancies: 20%+, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.
Where did we get our FICO credit score information from?
Check out this chart:
FICO Score
Pct of Population
Default Probability
800 or more
13.00%
1.00%
750-799
27.00%
1.00%
700-749
18.00%
4.40%
650-699
15.00%
8.90%
600-649
12.00%
15.80%
550-599
8.00%
22.50%
500-549
5.00%
28.40%
Less than 499
2.00%
41.00%
Make sure you understand the Class of properties you are looking at and the corresponding results to expect.
Metro Detroit has 132 cities, the City of Detroit 183 Neighborhoods, which we’re analyzing and classifying. Check out the map on our website where we’ve made this all easy to follow.
We can also share numerous examples of properties & portfolios we’ve assisted investors with!
DM us if you’d like to discuss this logical approach in greater detail!
Logical Property Management4.9464 Reviews - 1yKerlous TadresBusiness MemberRealtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votesHey Laurence,
Quote from @Laurence Fru:
Afternoon all,
I signed up for the Real Estate Rookie BootCamp years ago - then had a few life change situations, so am still absolutely a beginner at this.
I'm based in a HCOL area and have now started looking into out of state investing. Ideally I would like to pick somewhere that I'd have some connection to - but I'm really stuck and over analyzing everything.
Would love to connect to any North Jersey folk that are also out of state investing in long-term rentals.
Real estate investing can be really intimidating especially if you do not have the right team in place. Over-analyzing numbers is something you won't be able to get over if you do not see the future benefits of the investments you're investing in now. If you have a plan to be a long-term investor then you should be able give yourself more grace when it comes to investing and running numbers.
Kerlous Tadres | Reafco Real Estate542 Reviews - 1yJoey BanasihanPro MemberInvestor · Boise, ID · Member since 2019 · 238 posts · 189 votes
Hey @Laurence Fru - really appreciate your honesty here. Analysis paralysis is real, especially when you care about getting it right.
I work with a lot of out-of-state (and even out-of-country) investors, many of whom are in the same shoes — starting fresh, juggling life changes, and trying to find the “right” market that balances numbers and comfort level.
What’s been helpful for folks I work with is not just looking at markets, but getting really clear on your goals. Are you more focused on cash flow? Equity growth? Learning by doing? Building something flexible for your future family?
Because once we know what you are actually working toward, the market, the strategy, and the team can follow — not the other way around.
You’ve already done the hardest part — you’re still showing up - Realtor · McAllen, TX · Member since 2025 · 141 posts · 58 votes1y
Well if you want to pick somwhere that you would have some connection, start there. Once you find a place that you feel some kind of connection to, start analyzing. If the numbers are not there, then keep looking.
Now I know other people will say that being emotionally attacted to a property and making money are totally different. There are some poeple who see a property that they really love, but the numbers are not good but still buy it because they are emotionally attached. In my opinion, blend the two together. Since you are looking to invest out of state, there are tons of porperties out there. Eventually you'll find a deal where the numbers are good and you have a connection to.
- 1yJoe HammelBusiness MemberReal Estate Agent · Metro Detroit, MI · Member since 2018 · 614 posts · 666 votes
Investing out of state can definitely feel intimidating, especially if it’s early in your investing journey! It sounds like you’re already taking the right steps to educate yourself before taking that leap.
As you’re researching markets, it really depends on what your strategy and goals are. For example, if you’re looking for immediate cashflow vs longterm appreciation vs sweat equity, then that will help determine what market will fit your needs the best.
When it comes to building your team it comes down to your own due diligence. Once you pick a market, you’ll be able to look more into specific people/companies there. One thing you can do is find a local investor group after choosing your market and ask people in that group for feedback on anyone you’re thinking of working with.
Anyway, here is some info we put together on the suburbs of Detroit that seems to help when OOS investors are trying to decide on which market to invest in:
Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, solid ROI, and yes plenty appreciation. (#1 appreciating city 2023)
I personally make well over $100k/yr cash flow from my portfolio here. All of which, I’ve purchased within the last 5 years.
There are 2 types of people who dog on Detroit..
1. People who don't actually own property in Detroit
2. People who did it wrong and weren't able to execute.
If you do it right, it’s arguably the best market to invest.
Purchase: $80k-$130k
Rent: $1100-$1500 (no rent control in MI)
1% rule: .9%-1.4% rule deals
Coc ROI: 4-12%
Total ROI: 20-40%
Cash flow: $50-$250/door (after all expenses and budgeting for maint, capex, vacancy)
Appreciation: 3-10%+ (has been double digit for a decade)
Location: C+, B-
These numbers are based on the "sweet spot" in Metro Detroit. These are largely in the suburbs and some markets within the city. You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases. Where these numbers are found, there is a very high rate of rent actually being paid.
We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.
The bad reputation of “Detroit” comes from OOS investors wanting sub $40,000, D class properties in poor condition, because they pencil out to 2-3% deals on paper. We don’t buy those.
We have found what works and repeat it as much as funds allow.
Detroit has one the highest rent to price ratios in the country…and we focus on the best balance of price/location within the area.
I'm happy to share a picture of my portfolio if you/anyone is curious.
FIRE Realty Team - Keller Williams5380 Reviews
Join the conversationCreate a free account to reply, vote on answers and follow this thread.