Looking for out of state investing

Looking for out of state investing

Member since 2025 · 65 posts · 68 votes

Hi all,

I am currently in Brooklyn ny and it seems that my area everything is way to expensive to invest in ( if someone has any information that would be great on how I can invest here) although if I were to purchase out of state how can I gauge the market and understand the situation/areas ? What do you recommend for some one out of state 

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Memphis, TN · Member since 2024 · 234 posts · 100 votes
1y

Hey @Chaim Mal!

Totally feel you on the Brooklyn prices! It’s tough to cash flow there, especially starting out. That’s why a lot of investors in your shoes are looking at out-of-state markets like Memphis, where entry prices are way lower and the rent-to-price ratio actually works. One of the best ways to gauge a market remotely is to partner with a team that knows the area street by street. In Memphis, for example, we focus on B-class neighborhoods near major employers like FedEx and St. Jude. Areas where homes rent fast and tenants stay long-term. We look at how quickly properties lease after renovation and how long tenants stay (ours average 3.5 years), which helps reduce vacancy and maintenance issues.

If you're just starting, look for a turnkey provider that handles everything in-house. Acquisitions, renovations, property management. So you're not trying to piece together a team from afar. That kind of setup helps you invest confidently without needing to fly in every week. If you’re curious about how this looks in practice, I’d be happy to walk you through the Memphis model and what to watch out for in other markets. You’re asking the right questions already! It just takes one solid first deal to get the ball rolling!

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  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    1y

    @Chaim Mal

    stay within an hour or two of your home base so you can be in person and hands on

    PA or NY or NJ somewhere

    go to meetups, look at properties, build a network

    if you buy a random 'cheap' property thousands of miles away you'll probably just lose money

    good luck

    • Member since 2025 · 65 posts · 68 votes
      1y

      @Nicholas L. Thank you for the advice. My question is most if not all properties near by don't hit one percent rule.  So I would need to venture out to nj or pa that still leaves this as a question. How can I know more about a market ?  

    • Investor · Texas City, TX · Member since 2018 · 54 posts · 22 votes
      1y
      Quote from @Chaim Mal:

      @Nicholas L. Thank you for the advice. My question is most if not all properties near by don't hit one percent rule.  So I would need to venture out to nj or pa that still leaves this as a question. How can I know more about a market ?  

       @Chaim Mal 

      The 1% rule can be a helpful guideline, but it’s not universally applicable. It tends to work best with older or lower-priced properties, where rental income is more likely to meet or exceed 1% of the purchase price.

      However, newer properties or those in high-appreciation markets often don’t meet the 1% rule—but may still be solid investments due to lower maintenance costs, better tenant quality, or strong long-term value growth.

      In short, the 1% rule is just a starting point or barometer—not a hard rule. Always evaluate a property holistically, considering cash flow, appreciation potential, expenses, and your personal investment goals.

      I use a calculator that does way more than just crunch numbers. It spits out all the juicy metrics—monthly cash flow, Cash-on-Cash %, ROI, IRR, Cap Rate, GRM (that's Gross Rent Multiplier for us real estate nerds), the legendary 1% Rule, the mysterious 50% Rule, Gross Yield, and yes… even the ever-elusive CAGR. Basically, it's like having a financial crystal ball—minus the smoke and drama. 🤓

      My go-to criteria? Positive cash flow and a solid Cash-on-Cash return—because I like seeing those numbers work today. Of course, every investor has their own flavor. ...Appreciation, tax perks..... DM me if you want that calculator. Good luck!

  • Shawn McenteerBusiness Member
    Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
    1y

    Hi @Chaim Mal I would look deeper into house hacking.  You can hit 1% rule in NJ.  You don't have to have to house hack I just recommend it becuase you can purchase properties with low money down loans which in most cases allows you to move faster.

    House Hacking New Jersey561 Reviews
  • Min ZhangBusiness Member
    Real Estate Agent · Member since 2022 · 1k+ posts · 1k+ votes
    1y

    Hey Chaim, I recommend look for areas with solid job growth and a strong local economy. It’s a good indicator that people will continue to move to and stay in the area, which helps keep property values stable. I also believe having a reliable property manager is a game-changer, especially if you're not local. They handle everything from maintenance to tenant issues, making it a lot easier to manage remotely. And personally, I like to start small when diving into a new market. Something like a single-family home or duplex. It lets me get a feel for the area without taking on too much risk all at once. Best of luck on your search!

  • Samuel DioufBusiness Member
    Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
    1y

    Hey Chaim, I would first decide on whether you want appreciation, cashflow, or a mix of both. If you want cashflow.. look for markets with low entry prices and higher rent averages. If you want appreciation, identify markets with expanding industries and positive growth signals.

  • Mackaylee BeachPro Member
    Real Estate Agent · Kansas City, MO · Member since 2020 · 1k+ posts · 494 votes
    1y

    I would be delighted to share insights about the Kansas City market with you.

  • Memphis, TN · Member since 2024 · 234 posts · 100 votes
    1y

    Hey @Chaim Mal!

    Totally feel you on the Brooklyn prices! It’s tough to cash flow there, especially starting out. That’s why a lot of investors in your shoes are looking at out-of-state markets like Memphis, where entry prices are way lower and the rent-to-price ratio actually works. One of the best ways to gauge a market remotely is to partner with a team that knows the area street by street. In Memphis, for example, we focus on B-class neighborhoods near major employers like FedEx and St. Jude. Areas where homes rent fast and tenants stay long-term. We look at how quickly properties lease after renovation and how long tenants stay (ours average 3.5 years), which helps reduce vacancy and maintenance issues.

    If you're just starting, look for a turnkey provider that handles everything in-house. Acquisitions, renovations, property management. So you're not trying to piece together a team from afar. That kind of setup helps you invest confidently without needing to fly in every week. If you’re curious about how this looks in practice, I’d be happy to walk you through the Memphis model and what to watch out for in other markets. You’re asking the right questions already! It just takes one solid first deal to get the ball rolling!

  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    1y

    @Chaim Mal

    Investing in Brooklyn can be tough due to high prices, so looking out of state is a smart alternative—but you'll need to do your homework. Start by choosing a few markets with strong job growth, population trends, and rental demand. From there, dive into local data, connect with agents or property managers on the ground, and use tools like Rentometer, Zillow, or local Facebook investor groups to get a feel for neighborhoods.

    Good luck!

  • Memphis, TN · Member since 2023 · 100 posts · 24 votes
    1y

    Hi Chaim,

    You're in a similar spot to so many other investors. Try looking into cities in with stable economies, strong renter populations, and where housing is below the US median value. These will be markets where housing is affordable for both residents and owners. You can find several investor-friendly markets like this in the Midwest and Sunbelt states.

    Another route many investors take is partnering with a turnkey provider — companies that offer fully renovated, rent-ready homes, complete with long-term residents and full-service property management. This approach makes it much easier to build a diverse, hands-off portfolio, all under one roof and with a team that handles every step of the process.

    Wishing you the best!

  • Specialist · Long Beach, CA · Member since 2011 · 889 posts · 401 votes
    1y

    There's nothing wrong with investing in areas that are further away from you. You just need to connect with the right people. There are still plenty of markets that offer below median home prices and cash flow. Charlotte could be a nice place to look. It's not too far from you. Prices are $300K range and its a diverse economy. Or looking into the midwest like Indiana or Ohio.

  • Todd AndersonPro Member
    Real Estate Agent · Cape Coral, FL · Member since 2023 · 392 posts · 175 votes
    1y

    @Chaim Mal

    This is a story I hear all the time from other investors, and I've totally experienced it myself as well. With the technologies in today's world, there is an easier way to invest in good markets out of state.

    With OOS investing, there are two ways you can make it work. Take the time to build your own trusted team in a few markets. Or going with a turnkey provider. The investors that I work with have found it's much easier to use the turnkey provider which also gives them the ability to invest in multiple markets.

    As for which market to invest in, ask him that question on the forum, will give you multiple good answers. The best markets to invest OOS, our markets that are growing in both population and employment, and have a good landlord tenant laws. In this type of market, you were able to control your investment and get in the way of obvious appreciation.

    After being in REI for a number of years, I found that I didn't need to look only for good deals in bad markets. I found that it is better to look for good deals in good markets.

    Best of luck.

  • Sam McCormackBusiness Member
    Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 834 votes
    1y
    Quote from @Chaim Mal:

    Hi all,

    I am currently in Brooklyn ny and it seems that my area everything is way to expensive to invest in ( if someone has any information that would be great on how I can invest here) although if I were to purchase out of state how can I gauge the market and understand the situation/areas ? What do you recommend for some one out of state 


     Look at how other people are investing. Get connected with other people and see how they are doing it. Most people will invest close to them, which I encourage, but that may not be possible., like your scenario. So get connected with other OOS investors and as well as that, think about what you are looking for and then target the market that has that. If you want a market that cash flows, go to a cash flowing market (or an area that has has submarkets and invest in the ones that have more cash flow), if you want to be in an area that is more likely to appreciate, then go to that market. And of course there are markets that are in between the 2 so if you want to see both, they are available

    Think about what you want out of an investment property, and target markets/submarkets that have that. And consult with people who invest there

    I am in the Greater Cincinnati area, which I would see as an area that is a mix of the both, and has submarkets where cash flow is greater than other areas of Cincinnati. If you are looking for both, would love to answer any questions and help out

    Sam McCormack Realtor
    View Page
  • Real Estate Agent · Memphis, TN · Member since 2019 · 365 posts · 264 votes
    1y

    @Chaim Mal 

    You’re definitely not alone, lots of investors in high priced markets like Brooklyn are exploring out of state options. When you do, I’d recommend focusing on affordable cities with landlord friendly laws and staying within 15% of the market’s median home price. That’s where demand tends to be strongest and your downside is more protected.

    Markets like Memphis, Little Rock, and parts of Oklahoma are great examples. They offer lower entry points, strong rental demand, and policies that tend to favor property owners. Plus, these areas are growing steadily without the volatility of some higher priced metros.

    Whatever you decide, make sure you vet your local team well, boots on the ground support is key when investing remotely. Good luck getting started!

  • Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    1y

    Pick a market you have access to, so you can narrow the OOS gap. Anything you do remote is harder, you have an information disadvantage, your costs is higher for everything and you have operational inefficiencies. 

    The more you are there, the more you can narrow the information gap. The fewer interactions (repairs) you have the less your cost premium will play into your bottom line. 

    Investing in several markets is horrible advice. So is turn-key: profits are very slim in 2025 and the turnkey provider has to make a cut before selling to you - at that point just buy an index fund, you'll be better off.

  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    1y
    Quote from @Chaim Mal:

    Hi all,

    I am currently in Brooklyn ny and it seems that my area everything is way to expensive to invest in ( if someone has any information that would be great on how I can invest here) although if I were to purchase out of state how can I gauge the market and understand the situation/areas ? What do you recommend for some one out of state 

    Hi Chris! If you live in the NY area, you should definitely consider investing out of state. As an investor, you should look into income hacking. It's a concept which you earn a high income in your local market but you use the capital to invest in a much cheaper up and coming real estate market where you can still find cash flow and tons of appreciation! You can get 5 rentals in Columbus Ohio (all of them which hit the 1% rule and appreciate) for the price one 1 rental in California! I definitely recommend checking Columbus Ohio, it's one of the fastest growing markets in the US. For example Intel headquarters, Google, FB, Microsoft, LG, Amazon, Nationwide, Honda, etc. Additionally, the price point is still cheap enough to find the 1% rule and positive cash flow and it's super landlord friendly (so you will never have to go through a 12 month eviction or anything close to that!). Lastly, the price point is still very cheap here in the sense that you can still find investment deals that hit the 1% rule for 120-180k! Happy to connect and answer any questions you have!

  • Scott AllenBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2020 · 449 posts · 471 votes
    1y

    @Chaim Mal

    If house hacking a duplex or fourplex is not a good option for you to get started then you should consider out of state investing. Start by narrowing down a market you want to invest in (Research 3-5 and pick one). Start networking to find experts in the market you pick - you'll want to build a core four (agents, lenders, property managers, and contractors). If you have the time to do it - go and visit the city you plan to invest in so you can see the neighborhoods first hand, what the city is like, and what drivers are in that market. Best of luck getting started, reach out if you have any other questions!

    Reafco - Columbus, OH
  • Investor · Irvine, CA · Member since 2009 · 261 posts · 183 votes
    1y

    You don’t need to live near your investments, you need to understand the market, trust your team, and know your numbers. Living in CA, I’m always looking for out-of-state deals

    Involved in 5000+ home sales in over 40 markets and when finding properties for my clients, it's all about "Investor-Friendly Markets"

    Price-to-rent ratios are favorable (closer to or above the 1% rule)
    Strong population & job growth
    Landlord friendly
    Affordable Property Management

    Kansas City, Birmingham, Nashville, St. Louis all meet my criteria. 

    I am also working on a deal in Tampa and Ocala, where I’m working directly with the builder for pre-negotiated discounts for my clients.

    Happy to discuss further. But those are the markets I would start with. 

  • Property Manager · Dallas/Ft. Worth · Member since 2024 · 70 posts · 32 votes
    1y

    Hi Chaim,

    A lot of investors in high-cost areas like Brooklyn face the same challenge and turn to out of state markets to get started.

    One of the best things you can do is connect with experienced Realtors who specialize in working with investors, especially those who regularly work with out of state clients. They’ll not only help you gauge the market but also give you insight into specific neighborhoods, rental demand, and what to look out for.

    Also, don’t underestimate the power of networking on BiggerPockets. I’ve learned a ton here in a short time just by asking questions and staying active.

    If you’re considering investing in Texas, I’d be happy to point you in the right direction!

  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    1y

    Hi Chaim, I would recommend investing anywhere with steady growth. For example, you can look at the Columbus, OH market. On my BP profile you can learn more about my experience in Ohio and resources I have in the local area. Please let me know if you have any questions or if I can help with anything.

    Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
  • Nathan FisherBusiness Member
    Property Manager · Cleveland, OH · Member since 2020 · 317 posts · 269 votes
    1y
    Greater Cleveland is still the best. Some Cleveland Proper Laws are a bit silly, but they can be overcome. Cashflow, appreciation, and opportunity. Come to my hometown.
  • Rental Property Investor · Emmaus, PA · Member since 2021 · 154 posts · 85 votes
    1y

    Chaim, 

    If you are looking to invest in areas outside of your home town, I would start by making a list of areas based off of a few factors:

    - growth trends over the past 3-5 years

    - median income

    - job growth (or major employers in area)

    - crime rating

    - average rent/average vacancy

    You can add other metrics as well, but this will serve as a good start. Once you get data for all of these metrics, you can rate areas and give them a score and determine which areas fit your investment goals.

  • Jorge VazquezBusiness Member
    Real Estate Broker · Tampa, FL · Member since 2017 · 1k+ posts · 700 votes
    1y

    Hey Chaim, I've been investing in Central Florida for the past 20 years, and it's been a fantastic ride. The rent increases and equity appreciation have been consistently healthy, and Florida’s been "on sale" compared to many other major states. Plus, after COVID-19, we've seen a huge influx of people moving in, which keeps demand strong. It's a landlord-friendly state, so you can still find properties around the $100k mark with solid returns. If you're considering out-of-state investing, Central Florida is definitely worth a look!

    Graystone Investment Group519 Reviews
  • Flipper/Rehabber · Cleveland OH · Member since 2025 · 2 posts · 0 votes
    1y

    Hey Chaim

    I totally get where you're coming from—I'm originally from New York too, and the prices there can definitely make investing feel out of reach. I started investing out of state in 2022, focusing on Cleveland, OH. What helped me was diving deep into one market, learning the neighborhoods, and building a solid team on the ground. Cleveland has been great for me—it's affordable, has strong rental demand, and there’s still a lot of room for growth. If you ever want insight on how to get started or what areas to look at, I’m happy to share what I’ve learned!

    Quick numbers for my latest project Rehab took 6 weeks. 

    🏠 Purchase Price: $65,000
    🔧 Rehab Cost: $75,000
    💰 Total Investment: $140,000
    💵 Rental Income (3 Units): $2,600/month or $31,200/year Before expense

    📊 ROI Breakdown

    • 🏠 Rental ROI (after expenses):
      → 13.71% annual ROI

    • 💸 Flip ROI:

      • Resell at $175,000 → 25% ROI

      • Resell at $190,000 → 35.71% ROI

  • Real Estate Broker · Kansas City Metro · Member since 2015 · 2k+ posts · 1k+ votes
    1y

    I’ve helped a lot of out of state investors invest in the KC Metro. Starts with knowing the data and I share that with investors so they know what fits for them here in KC. If you want to talk about KC, let me know. 

  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    1y

    @Chaim Mal

    Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location 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%

    Source: Fair Isaac Company

    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!

  • Eric FernwoodBusiness Member
    Realtor · Las Vegas, NV · Member since 2014 · 1k+ posts · 1k+ votes
    1y

    Hello @Chaim Mal,

    With today's high interest rates, finding properties that cash flow in their first year is difficult in most cities—except perhaps in cities with significant population decline. In these cities, you can buy properties at very low prices that may provide immediate cash flow. However, properties in such cities typically won't appreciate meaningfully in value or see meaningful rent increases over time, so they will not enable financial independence.

    Real estate investing is a solution to a long-term problem: financial independence. Financial independence isn't just about a specific dollar amount, it's about an income that will sustain your current lifestyle for the rest of your life. This requires investing in a location where rents outpace inflation. Rents, like prices, are driven by long term demand.

    Cash flow and ROI only predict how a property is likely to perform initially under ideal conditions. If you expect to live 30 more years, what happens in the first year matters less than what happens over the following decades. Therefore, you need to invest with a long-term perspective rather than focusing solely on day-one performance (Cash flow and ROI).

    Invest in cities with the following characteristics.

    • Significant and sustained population growth.
    • Low overhead costs (especially property taxes and insurance).
    • Pro-landlord legislative environment (rapid and low cost evictions, is one consideration).
    • Rapid and sustained appreciation of existing homes.
    • Low risk of natural disaster.

    In summary, if your goal is financial independence, take a long-term view when choosing an investment city, as your financial success is directly linked to that city's long-term performance.

    FERNWOOD Team, KW VIP Realty520 Reviews
    • Member since 2025 · 65 posts · 68 votes
      1y

      @Eric Fernwood thank you for the insights. If cash flow isn't going to be a priority, then how will one maintain a property if there is no income? As well how would one gauge a market to see if it will appreciate and continue to appreciate at a steady growth? 

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