Learning Out of State Investing
New to Real Estate · Westchester County, NY · Member since 2020 · 18 posts · 25 votes
Learning Out of State Investing
Most Popular Reply
Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ voteshello. if you post specific questions here, folks will answer them. i'd be happy to connect and answer any questions you have. i have nothing to sell and in fact i seem to try to talk folks out of starting out of state as often as not.
i think this was mentioned in another thread but the best way to start is with a house hack, period, full stop. buying a random out of state property just because you can and then losing money on it every month isn't going to do anything for you... it's going to take you backwards.
hope this helps
standing by for more questions
15 Replies
- 9moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Sebastian Lim:
Would anyone have a way to learn all the components of out of state investing? Books, courses? I've got about 50k and i just started a new job last week at 56k and already am already grinding thru the day besides the greene book long distance investing
Hey Sebastian! Welcome to BP and congrats on getting started, that’s a solid spot to be in with 50k saved and steady income coming in. Honestly, you don’t need to boil the ocean with courses right away, especially if time is tight. The biggest learning comes from understanding deal analysis, building a simple out-of-state team, and seeing how real deals actually work. Reading is great, but pairing that with forum posts, case studies, and market-specific learning helps everything click faster. A lot of people get stuck trying to learn everything before acting, but the basics repeat themselves across markets. One thing that really helped me early on was focusing on one strong cash-flow market and learning it deeply instead of chasing every strategy. That’s why I like Columbus Ohio so much for newer investors, the macroeconomics are on fire with population growth, job growth, and companies like Intel, Amazon, Google, Honda, Microsoft, and LG expanding here, yet you can still find properties in the 120–180k range that hit the 1% rule and cash flow. It makes the learning curve way easier when the numbers actually work. Keep it simple, keep learning a little every day, and don’t underestimate how much you’ll learn just by analyzing real deals. Happy to connect and answer any questions you have!
Jimmy Lieu, Red 1 Realty4.9120 Reviews- New to Real Estate · Westchester County, NY · Member since 2020 · 18 posts · 25 votes9mo
@Jimmy Lieu hi jimmy what kind of a team would u need in place to start analyzing deals?
- 9moArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 911 votes
Start small and focus on cash flow, market trends, and property management. Connect with investors who are actively sourcing off-market deals in the Midwest, paying attention to neighborhoods with strong rental demand and upside potential. Seeing actual deals in action and understanding how they’re structured and managed remotely will give you insights that books alone won’t cover.
- 9moMarc RiceBusiness MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
Quote from @Sebastian Lim:
Would anyone have a way to learn all the components of out of state investing? Books, courses? I've got about 50k and i just started a new job last week at 56k and already am already grinding thru the day besides the greene book long distance investing
Hi Sebastian, I would suggest speaking with the local agents in the areas you are interested in investing. Additionally, there are some online courses that might help too!
Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews - Real Estate Agent · Columbus | Toledo · Member since 2019 · 607 posts · 768 votes9moHey Sebastian, you definitely need to dial down exactly what you want to invest in first, whether that is SFH fix and flips, long term rentals, or multifamily. Books like The Millionaire Real Estate Investor, Best Ever Apartment Syndication Book, and One Rental at a Time are really good reads for building that foundation. Also check out Long Distance Real Estate Investing by D. Greene to help you manage things from a distance. Once you have chosen a strategy and market, start joining the local REIA and facebook groups for that area. I also recommend taking a trip to the area because there is no substitute for seeing it in person.
Quote from @Sebastian Lim:
Would anyone have a way to learn all the components of out of state investing? Books, courses? I've got about 50k and i just started a new job last week at 56k and already am already grinding thru the day besides the greene book long distance investing
- 9moMin ZhangBusiness MemberReal Estate Agent · Member since 2022 · 1k+ posts · 1k+ votes
Good question, Sebastian! Honestly you’re already doing the right thing by working through the Greene book. That one clicked for me too when I started. Beyond books, I found it more helpful to pair learning with real people actually doing deals in the Midwest: BP forums, local investor meetups even virtual ones and podcasts where they walk through real numbers and mistakes. Courses can help, but most just repackage the basics and the bigger unlock is understanding team building, underwriting conservatively, and setting clear buy criteria so you don’t overthink every deal after work. What part of out of state investing feels the most confusing right now? finding deals, trusting the numbers, or managing from afar? Happy to keep the conversation going!
- New to Real Estate · Westchester County, NY · Member since 2020 · 18 posts · 25 votes9mo
@Min Zhang hi Min, i think finding all the property managers and contractors seems intimidating
- Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes9mo
Hey Sebastian,
That’s a great solid spot to be in, especially when you’re just getting started. One approach that tends to work well for out-of-state investing is picking one market and really getting familiar with it while you build a local team there. Learn the rents, price points, taxes, and landlord laws, and start conversations with investor-friendly agents, property managers, and contractors. At the same time, get in the habit of running numbers on deals in that market. Do this consistently. It will help you understand what actually works, and you can build confidence long before you’re ready to make an offer.
If you ever want to talk things through or bounce ideas around, feel free to reach out. Happy to connect and help however I can!
- 9moRemington LymanBusiness MemberReal Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
Quote from @Sebastian Lim:
Would anyone have a way to learn all the components of out of state investing? Books, courses? I've got about 50k and i just started a new job last week at 56k and already am already grinding thru the day besides the greene book long distance investing
Give me 50k and I will teach you everything, lol!
There are a lot of good books and resources on this site
- 9moNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
hello. if you post specific questions here, folks will answer them. i'd be happy to connect and answer any questions you have. i have nothing to sell and in fact i seem to try to talk folks out of starting out of state as often as not.
i think this was mentioned in another thread but the best way to start is with a house hack, period, full stop. buying a random out of state property just because you can and then losing money on it every month isn't going to do anything for you... it's going to take you backwards.
hope this helps
standing by for more questions
- 9moTravis TimmonsPro MemberRental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
@Nicholas L. out here doing the lord's work. You have enough cash to buy about a $150k house out of state (down payment, closing costs, make ready expenses/repairs, and cash reserves). That's going to be an older house that requires a lot of upkeep and maintenance in a crappy neighborhood. We're on the other side of the greatest 2-3 year run up of appreciation in our lifetimes, and if a place still sells for less than $150k, it's because very few people want to live there. Very few people will want to rent there either. It will not go up in value or rents in real, inflation adjusted terms. For the right local investor that can place the right tenants and manage hands on, it can work. For an out of state, first time investor, it's a bad idea/asset class.
Compare that to a house hack. $50k in cash can realistically get you into a $500-600k property depending on how your debt to income ratio looks. If that property doubles in value in the next 15 years, you just turned $50k into $500k along with the growing rents and loan paydown. You're going to have to fight to hang on (scrap and make extra money if needed), but the long term, total return on a house hack obliterates a cheap house out of state.
The most likely outcome for your out of state investment will be something like this - you'll buy it without really knowing what you have until you already own it, get it rented, deal with hassles, get frustrated that it does not make as much money as you thought it would (it's going to lose money if you are honest about expenses - all properties do for the first couple of years), you'll be disappointed that it has not gone up in value like you hoped, sell within 2-3 years, and lose money when you account for transaction costs buying and selling. That is not an absolute, but it is what happens more often than not - especially for first time investors.
I'm of the opinion that owner occupied strategies and/or heavy value add projects are the only investments that make sense right now. The market is tough and unforgiving everywhere. We started with a live-in flip and are currently on our 3rd one bc making a pile of tax free money is worth living a job site for a couple of years. That or a single family rent by the room/2-4 unit house hack would be my recommendation if you care to hear what a stranger on the internet thinks.
- 9moCamren BerryPro MemberAZ · Member since 2021 · 86 posts · 14 votes
That’s a great question. Out-of-state investing has a lot of moving parts, and it’s smart to want a clear framework early on. Books and podcasts help, but honestly, the biggest learning curve tends to be market selection, deal structure, and building the right local team.
I work with people getting started remotely and see this path all the time, especially with solid savings and steady income like yours. We have a structure that would help you keep your money and still buy properties. Happy to connect and share what’s actually working in practice if that helps.
- 9moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
How much do you know about Property Classes?
Recommend you spend some time learning about them, so you don’t mistakenly buy a property that will NEVER meet your expectations!
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.
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!
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
Logical Property Management4.9451 Reviews - Real Estate Agent · Central New York · Member since 2023 · 207 posts · 96 votes9moAs others have mentioned, figure out the strategy first! SFH vs MFH, cash flow vs appreciation etc. You should ideally have a very clear buying criteria. The next thing I would do is start building your network…a local lender to that area, a solid reliable agent, and maybe one or two handymen. Another very important thing, I recommend looking into any rental regulations and codes/laws that exist in that locale. This should be something your agent can help with, but I encourage your own research as well. In Syracuse there’s a rental registry that inspects property condition and livability for example where I am. A lot of metro areas will also typically have some form of investor meet up groups that can be a wealth of knowledge!
- Member since 2025 · 26 posts · 22 votes9mo
Its not that complicated, reading books about "how" is also kind of silly. This is not rocket science. You look at a house, you run the numbers on said house, you look at rental rates in the area, school ratings, comps, does said house need repairs, appliances, etc. Do you want to make money from renting from day one? How much? Do you just want to put money in a house and let it appreciate over time? Do you want to manage it? Make a decision, repeat.
Believe it or not it just all comes down to numbers. Does this work financially? If your going to invest $50k to be net negative every month hoping for long term gain find a different investment. If you want to invest $50k to hopefully gain appreciation in an asset there are other ways besides RE. We have seen a dramatic increase in prices that are unsustainable. I am fortunate to reap the benefits of exploding value but I also know that stuff hits the fan all the time too. Stay cautious my friends.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.