Out of State Property Advice
Member since 2026 · 1 post · 5 votes
Out of State Property Advice
Most Popular Reply
Michael SmytheBusiness Member
Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votesQuote from @Antwon Dallas:
My business partner and I are thinking about buying our first rental property in Mississippi. Any advice for newcomers getting started in this industry. All advice appreciated!
A common issue, so Copy & Paste info below:
You’re ALWAYS better off investing locally, where it’s easier to:
- Learn the market
- Network to find deals
- Network to find contractors
- Be more hands-on
- Driveby property to keep tabs on it
- Network to find a decent Property Management Company (PMC)
Next best location is somewhere else you lived, where you have an existing network of family & friends to help you as accomplish the above list as needed.
If you invest OOS, your biggest challenge won't be finding properties to meet your goals on paper, it’ll be successfully outsourcing all of the above.
The biggest mistake we see OOS investors making in our market, over and over again, is not fully understanding Neighborhood/Property/Tenant Classes and how they impact your probability of success!
They all run their ROI numbers assuming Class A results – when buying Class B, C & even D rentals.
Then they’re shocked when their performance expectations aren't met😞
If you choose to invest OOS, and have little to no landlord experience, we highly recommend targeting Class B Neighborhoods/Properties/Tenants. If you target Class C, you better be prepared emotionally & financially for plenty of challenges.
You can find Class B properties in the Midwest to BRRRR, but it will take more digging and YOU will need to understand how to analyze & identify them - because a lot of agents, wholesalers, PMCs, etc. will try to sell you Class C or D misrepresented as Class B:
- Many of them don't know/care what Class the properties are, so they're incompetent.
- Others know exactly what they are doing, so should be labeled as crooks!
EITHER WAY YOU LOSE!
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 will affect what type of contractors, handymen and property management companies you should target and be willing to deal with a property.
The Property Class will also impact the maintenance & renovations you do to, “Maintain to the Neighborhood”.
Why is that important?
Well, if you buy & renovate a property in Class D area to Class A standards, what Tenant Class will actually 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.
For example, Metro Detroit has 132 cities and the City of Detroit 183 Neighborhoods, which we’re analyzing and classifying to make better investing decisions.
Horror Stories from those that did NOT Understand What they were Buying:
https://www.biggerpockets.com/forums/48/topics/1137397-baltimore-a-path-to-never-ending-pain
https://www.biggerpockets.com/forums/432/topics/1231840-sell-at-a-loss-or-rent-at-a-loss
https://www.biggerpockets.com/forums/311/topics/840134-memphis-turnkey-tenant-turnover-costs
https://www.biggerpockets.com/forums/963/topics/1195280-experience-of-oos-investing-in-cleveland-after-15-years
Logical Property Management4.9454 Reviews
25 Replies
- 5moJaycee GreenePro MemberReal Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
Quote from @Antwon Dallas:
My business partner and I are thinking about buying our first rental property in Mississippi. Any advice for newcomers getting started in this industry. All advice appreciated!
Hey @Antwon Dallas, welcome to the BP Forum! What attracted you and/or your partner to Mississippi? I'm assuming the property is either a SFR or a 2-4 unit property, is that accurate?
- Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes5mo
Build your team and understand the area you are looking in. If you can visit the area I would
- 5moEvan HoppleBusiness MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2023 · 284 posts · 420 votes
@Antwon Dallas
Start by finding a strong investor-friendly agent in the market you choose. They'll help you build the rest of your team from there.
Reafco Real Estate - Investor · Jackson, MS · Member since 2014 · 1k+ posts · 769 votes5mo
Hi Antwon,
I'm a native of California but I taught at JSU for twenty years and began buying investment properties in Mississippi during the recession. I returned to California during the pandemic to take care of my mother. I've been slowly selling off my portfolio at the rate of a house a year. In terms of rent relative to property costs Mississippi can't be beat but don't expect a lot of appreciation. For that reason it is important you only consider properties that will give you an immediate cash flow. Also, settlement problems are endemic here, thanks to yazoo clay. You probably can't even get a loan for a property with significant settlement problems. Also, lots of houses are in flood zone and flood insurance is expensive. If you do consider a house in a flood zone look for private flood insurance.
warmest, Susan
- Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes5mo
Do your own research first so you understand the basics of the Mississippi market you’re looking at, especially rents, neighborhoods, and what actually moves quickly.
Then strengthen what you think you know by talking to a strong investor-friendly agent in that specific market. That’s where you start verifying assumptions instead of guessing. A good local agent will usually give you a much clearer picture of what’s realistic.
After that, the big piece is building your team before you buy. At minimum that usually means a solid agent, a reliable property manager, and someone who can handle repairs locally. Out of state investing really comes down to whether your team can execute without you being there.
If you line those pieces up first, the first deal tends to go a lot smoother.
- 5moTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
Know the area you are buying in and look at the property in person before you buy it.
- 5moMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
Quote from @Antwon Dallas:
My business partner and I are thinking about buying our first rental property in Mississippi. Any advice for newcomers getting started in this industry. All advice appreciated!
A common issue, so Copy & Paste info below:
You’re ALWAYS better off investing locally, where it’s easier to:
- Learn the market
- Network to find deals
- Network to find contractors
- Be more hands-on
- Driveby property to keep tabs on it
- Network to find a decent Property Management Company (PMC)
Next best location is somewhere else you lived, where you have an existing network of family & friends to help you as accomplish the above list as needed.
If you invest OOS, your biggest challenge won't be finding properties to meet your goals on paper, it’ll be successfully outsourcing all of the above.
The biggest mistake we see OOS investors making in our market, over and over again, is not fully understanding Neighborhood/Property/Tenant Classes and how they impact your probability of success!
They all run their ROI numbers assuming Class A results – when buying Class B, C & even D rentals.
Then they’re shocked when their performance expectations aren't met😞
If you choose to invest OOS, and have little to no landlord experience, we highly recommend targeting Class B Neighborhoods/Properties/Tenants. If you target Class C, you better be prepared emotionally & financially for plenty of challenges.
You can find Class B properties in the Midwest to BRRRR, but it will take more digging and YOU will need to understand how to analyze & identify them - because a lot of agents, wholesalers, PMCs, etc. will try to sell you Class C or D misrepresented as Class B:
- Many of them don't know/care what Class the properties are, so they're incompetent.
- Others know exactly what they are doing, so should be labeled as crooks!
EITHER WAY YOU LOSE!
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 will affect what type of contractors, handymen and property management companies you should target and be willing to deal with a property.
The Property Class will also impact the maintenance & renovations you do to, “Maintain to the Neighborhood”.
Why is that important?
Well, if you buy & renovate a property in Class D area to Class A standards, what Tenant Class will actually 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.
For example, Metro Detroit has 132 cities and the City of Detroit 183 Neighborhoods, which we’re analyzing and classifying to make better investing decisions.
Horror Stories from those that did NOT Understand What they were Buying:
https://www.biggerpockets.com/forums/48/topics/1137397-baltimore-a-path-to-never-ending-pain
https://www.biggerpockets.com/forums/432/topics/1231840-sell-at-a-loss-or-rent-at-a-loss
https://www.biggerpockets.com/forums/311/topics/840134-memphis-turnkey-tenant-turnover-costs
https://www.biggerpockets.com/forums/963/topics/1195280-experience-of-oos-investing-in-cleveland-after-15-yearsLogical Property Management4.9454 Reviews - 5moKerlous TadresBusiness MemberRealtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
@Antwon Dallas, I would recommend connecting with a local property manager and investor-friendly realtor before you even close, because managing out of state without boots on the ground is where most first-timers get burned. From my experience, your property manager is really your most important hire in this whole deal.
Kerlous Tadres | Reafco Real Estate540 Reviews - Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes5mo
#1. Don't make your first investment out of state.
#2. Don't do it with a partner.
#3. Those two ideas will likely make you hate life for a long time.
Start with a house hack. Buy a house and rent rooms. Can your partner rent a room from you? Control the deal.
- 5moAlfath AhmedBusiness MemberReal Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
Quote from @Antwon Dallas:
My business partner and I are thinking about buying our first rental property in Mississippi. Any advice for newcomers getting started in this industry. All advice appreciated!
Good question @Antwon Dallas. Find a good market in the midwest where your investments would make sense from both cashflow vs. appreciation.
You want a market that is tech driven, landlord friendly, and affordable. That will mean more jobs, more income, higher property prices, and better opportunity for your rental to perform better.
Any state in the midwest works. Find a major city and only invest there. Connect with a good investor-focused agent who is also an investor themselves. Have him connect you with his team of contractors, lenders, property managers. Go visit the market.
Your agent will send you good investment opportunities off-market and on-market. Ask for rent comps, sales comps, info on mechanicals, and have agent find out how far on the price you guys can go to make it make sense.
Get inspection/contractor walkthrough, speak to PM on rents, and that is all.
ReafCo | Ahmed Group 536 Reviews - 5moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votesHey Antown, that’s awesome you’re getting started, biggest thing I’d say for your first deal is keep it simple and focus on buying right because that’s what will make or break your experience. Spend time really understanding the numbers like rent, expenses, taxes, insurance, and maintenance so you’re not surprised later, and be conservative with your estimates. It also helps a lot to stay in a price range where you have a buffer for repairs and vacancies, especially early on. Make sure you understand the local rental demand and tenant profile in the area you’re buying, because a good property in a weak rental pocket can still struggle. I’d also recommend building a small team early, even if it’s just a reliable contractor and someone you can call for property management questions, since those relationships save you a lot of stress. Lastly, don’t overcomplicate your first deal trying to chase perfection, a clean, stable, cash flowing property is usually a better starting point than a heavy rehab with a lot of unknowns, and once you get that first one under your belt everything starts to make a lot more sense.
Quote from @Antwon Dallas:
My business partner and I are thinking about buying our first rental property in Mississippi. Any advice for newcomers getting started in this industry. All advice appreciated!
Jimmy Lieu, Red 1 Realty4.9120 Reviews - Rental Property Investor · Wilmington, NC · Member since 2019 · 69 posts · 51 votes5mo
Hey @Antwon Dallas - Everyone’s advice here is sound, once you’ve decided on the market you need to find an investor friendly agent (ideally one with their own rental properties) who can help you narrow in on the neighborhoods with strong cash flow/appreciation potential, avoid crime, and run numbers on properties.
If you’re still early stage trying to nail down the market (it seems like you are, Mississippi is a pretty broad target!) I built a tool called Tenantry AI for quick market comparisons on inventory, affordability, and demographic data. Good luck!
- Investor · Hendersonville, NC · Member since 2016 · 498 posts · 285 votes5mo
Quote from @Antwon Dallas:
My business partner and I are thinking about buying our first rental property in Mississippi. Any advice for newcomers getting started in this industry. All advice appreciated!
Out of state can work, but your team matters a lot more since you’re not there day to day. A solid property manager is huge, and I’d spend time upfront making sure they actually know the tenant base and stay on top of issues. I’d also get familiar with the local laws because they can vary more than people expect. On the deal side, I’ve had better luck when I’m not just relying on listings but looking for situations where the owner has a reason to sell, sometimes that shows up in things like deferred maintenance or ongoing issues with the property. And definitely leave room in your numbers for taxes, insurance, and repairs, those tend to hit harder when you’re managing remotely. - 5moVijay FriedmanBusiness MemberMiami, FL · Member since 2026 · 766 posts · 122 votes
Quote from @Antwon Dallas:
My business partner and I are thinking about buying our first rental property in Mississippi. Any advice for newcomers getting started in this industry. All advice appreciated!
Out-of-state investing can work, but I’d be extra conservative on the first rental. Before focusing on the property itself, I’d build the local team first: investor-friendly agent, property manager, insurance contact, contractor/handyman, and lender.
For Mississippi, I’d pay close attention to taxes, insurance, flood zone, rent demand, property condition, and who will manage repairs since you won’t be local. I’d also run the numbers with vacancy, maintenance, management fees, and reserves included.
If the numbers only work under perfect assumptions, I’d pass. If it still cash flows with conservative assumptions and you have a reliable local team, it may be worth pursuing.
- 5moCassie WebbBusiness MemberBiloxi, MS · Member since 2024 · 5 posts · 1 vote
I definitely recommend finding an agent who specializes in investors and a good property manager. What parts of MS are you considering? I’m on the coast and can give some pros and cons, depending on the areas you’re considering.
Next Step Property Management59 Reviews - 5moStephen QuesinberryBusiness MemberReal Estate Agent · Cumming, GA · Member since 2016 · 226 posts · 157 votes
Biggest thing early on is to narrow your focus. Pick a specific market (or even a couple submarkets), a price range, and a property type, then go all in on learning those. Don’t try to analyze everything at once.
Start looking at deals consistently, even before you’re ready to buy. Run numbers, track rents, see what sells vs. what sits. That repetition is what builds your confidence and helps you recognize a good deal when it shows up.
A few practical things:
- Underwrite conservatively (vacancy, maintenance, capex, management)
- Assume you’ll use a property manager, even if you plan to self-manage
- Make sure you have reserves set aside, don’t rely on cash flow alone
- Build a small local team (agent, lender, PM) you can trust
Also make sure you and your partner are aligned on roles, expectations, and exit strategy upfront. That saves a lot of headaches later.
Keep it simple, stay consistent, and focus on getting your first solid deal done. Good luck!
Cornerstone Real Estate Partners - Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes5mo
Start by picking one market and sticking with it. Instead of jumping between cities, focus on one area and really learn it. Get a feel for rents, which neighborhoods are stable, what types of tenants you’ll attract, and what a good deal actually looks like there. When you know a market well, making decisions gets a lot easier.
It also helps to work with an investor‑friendly agent. Not just someone who sells houses, but someone who understands rentals, numbers, and what makes a property perform. They should be helping you analyze deals, point out risks, and give you real insight into the area, not just unlock doors.
From there, build your team. Your agent can usually point you toward a good property manager, contractor, and even a lender who understands investor deals in that market. When you’re investing from a distance, your team becomes your eyes and ears. They’re the ones actually carrying out the plan.
And since you’re partnering with someone, make sure everything is clear upfront. Decide who handles what, how decisions get made, how profits are split, and what happens if one of you wants out. It’s not the exciting part, but it’s what keeps things smooth once you’re in a deal together.
- 5moSteven GlickBusiness MemberLender · Buffalo · Member since 2024 · 115 posts · 33 votes
Welcome to BP, Antwon. Since you’re buying with a partner, get the structure clear before you start making offers who’s on the loan, how equity is split, and how the lender views the partnership matters more than most first-time investors realize.
Mississippi can offer strong cash flow at lower price points, but some lenders have minimum loan amounts that can become an issue depending on the deal size. Worth sorting that out early.
Best thing you can do on a first deal is lock down the partnership and financing upfront, not after you find a property you like.
- Member since 2024 · 22 posts · 12 votes3mo
Hey Antwon, one thing worth flagging before diving into "how to get started" — Mississippi covers a lot of very different submarkets (Jackson metro, Gulf Coast, university towns like Oxford/Starkville, smaller rural areas), each with pretty different price points, rental demand, and risk profiles. Worth narrowing down which specific area actually fits your goals (cash flow vs. appreciation, budget, etc.) before getting deep into financing or property specifics — the "right" city within Mississippi can matter as much as the state-level decision itself.
- Rental Property Investor · Grapevine, TX · Member since 2020 · 136 posts · 52 votes3mo
Quote from @Antwon Dallas:
My business partner and I are thinking about buying our first rental property in Mississippi. Any advice for newcomers getting started in this industry. All advice appreciated!
Look into the Southaven area. Our rentals have worked great there. 38671 deals go quick but if you're able to make the numbers work, jump on it.
- Investor · Jackson, MS · Member since 2014 · 1k+ posts · 769 votes3mo
I don't think anyone has mentioned this yet, but be sure to check for foundation problems. This state is built on yazoo clay so we have a lot of it. Look for cracks inside and out.
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