Investing out of state

3 Replies

Hello all! I am curious to hear your opinion on investing out of state. The process of getting the ball rolling and choosing a market. Do you have any insight on how to choose a market? I have found myself very interested in my current state (Colorado) but finding its a little expensive but not out of range. I am however interested in my home town market and my wife’s hometown market. Have other investors felt that desire to go back home and take advantage of some relatively inexpensive real estate to see some cash flow?

@Zachary Beauchesne & @Mike Justice

You're not going to be able to do it without a decent partnership in place. I just sold a duplex we owned in Virginia. It was decent, we turned a profit, but felt we had managed it sub-optimally because our management team was not as proactive as we would've liked. You'll get dinged on the 'must have' items, because you can't go over there and check it out yourself, or build good systems and processes to manage that.

Syndications and more passive investments tend to rid you of this problem. The manager is taking all those efficiencies on their shoulders. Given the preferred return arrangements, the asset manager is very much incentivized to build efficiencies, because they will make very little money otherwise.

Regardless, have a ground game strategy and know that before you go into a market. Big projects from a distance can be quite a money pit.