Beginner Starting Off w/BRRRR

[Tunde Osilaja]

Hi there -- I'm a relatively new RE investor (just closed on my first property in May), and I'm researching locations to begin building my portfolio of RE properties. My two options are: (1) =Continuing to invest locally in Chicago; (2) Investing out of state.

(1) Chicago  

Pros: Closer to me

Cons: Costlier market

(2) Out of State

Pros: Can find cheaper real estate

Cons: harder to manage remotely

Anyone have any thoughts?

[Paul De Luca]

Quote from @Tunde Osilaja:

Thanks @Anthony McEvoy -- makes total sense. With respect to scaling, my assumption is that a cheaper market means I could scale faster, but it sounds like that may not be the case? 

I took a look at this BP cashflow market analysis, and Detroit has a median house price of $63k versus Chicago which is about $329k. Are you saying that there is really no major cost advantage to investing in market's like Detroit versus markets like Chicago?

 Cheaper =/= better. In fact, the properties are cheap for a reason and they will come with their own headaches. Can you get more doors potentially? Yes. Will those investments cash flow better than more expensive properties? Maybe.