Advice on multi family out of state investing

Dallas, Texas
Out of State Investing
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Advice on multi family out of state investing

Joe Bouthillette
Member since 2020 · 1 post · 3 votes
Hey everyone, I’m new to the group and excited to learn from you all. I’m currently based in Boston and own a rental here, but I’m trying to decide between buying another property locally vs. investing in an out-of-state multifamily for better cash flow. Would love to hear from anyone who’s gone the out-of-state route: • How did you pick your market? • Did you use a property manager or build a local team? • What were the biggest challenges being remote? • Do you feel it’s been worth it vs. staying local? Also open to any advice from people who chose to keep investing in Boston instead. Appreciate any insights, just trying to get smarter before making my next move 🙏
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Nick Sansivero
Rental Property Investor · Wilmington, NC · Member since 2019 · 69 posts · 51 votes
5mo

Hey @Joe Bouthillette, I have 2 out of state properties, for both of them I sort of backed into the market based on my criteria.. so I start with getting crystal clear on what I'm looking for (rather than starting with location), so: property type, purchase price, proximity to me, cash flow / appreciation goals, etc. Then I start narrowing down markets that fit.

Curious where outside of Boston are you thinking? If you share some of your property criteria I can try to nail down a few markets for you. Let me know!

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  • Caleb Brown
    Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
    5mo

    Picking a market is tough as there is a million out there. You want to look at all the fundamentals of the market along with the average insurance cost, property taxes, etc. Referrals is a good way to build your team. Connect with vendors and ask for referrals for other ones you need. Ones that are busy will have referrals. Vet each person so you don't get taken advantage of. If you can stay local or as close to possible, that'd be ideal. Easier to manage and invest with what you are familiar with, overall it's comparing the numbers/risk.

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  • Kerlous TadresBusiness Member
    Realtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
    5mo

    @Joe Bouthillette, if cash flow is your main goal, out-of-state multifamily is hard to argue against. Staying local in a high-cost market means the numbers rarely pencil out without a massive down payment. From my experience investing in Midwest markets like Columbus, Ohio, you can find solid 2-4 unit properties that actually cash flow from day one at a fraction of the price. Pick your market based on rent-to-price ratios and job growth, lock in a trusted property manager before you close, and treat it like a business from mile one; that's really the whole playbook.

    [email protected]614-490-1163
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  • Mike PaolucciBusiness Member
    Realtor · Columbus Cleveland Dayton, OH · Member since 2022 · 501 posts · 553 votes
    5mo
    Quote from @Joe Bouthillette:
    Hey everyone, I’m new to the group and excited to learn from you all. I’m currently based in Boston and own a rental here, but I’m trying to decide between buying another property locally vs. investing in an out-of-state multifamily for better cash flow. Would love to hear from anyone who’s gone the out-of-state route: • How did you pick your market? • Did you use a property manager or build a local team? • What were the biggest challenges being remote? • Do you feel it’s been worth it vs. staying local? Also open to any advice from people who chose to keep investing in Boston instead. Appreciate any insights, just trying to get smarter before making my next move 🙏

     Hey @Joe Bouthillette. Welcome to BP. I'd always advise at buying closer to home but if cashflow is your main desire, then I'd recommend going Out of State. I had to that back in 2021, more because everything was too expensive and it didn't make sense for me to be running a negative every month. 

    When choosing a market - look at the economic drivers (population / company growth both now and moving into the future. Next look at how friendly the state is with landlords. In CA, the landlord laws practically handcuffed me and didn't really make sense. 

    Property Manager - yes, I'd generally recommend using a property manager unless you're in a A/B neighborhood. Even then, I'd potentially still use a PM to manage the day to day operations so you can focus on your everyday life / goals. Managing from OOS can be a full time job depending on the issues at hand. 

    Biggest challenge was wrapping my mind around buying a property sight unseen. Once you get past that initial hurdle and used to the process, it gets a lot easier. 

    It's always worth it to stay local - easier to manage, and you can swing by and take a look at it pretty easily. OOS is still a great alternative though. 

    Advice - swing by the market you're going to invest in and see what it's about. Not a bad idea to see the area. 

    [email protected]614-892-9184
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  • Arman AhmedPro Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 957 votes
    5mo
    Quote from @Joe Bouthillette:
    Hey everyone, I’m new to the group and excited to learn from you all. I’m currently based in Boston and own a rental here, but I’m trying to decide between buying another property locally vs. investing in an out-of-state multifamily for better cash flow. Would love to hear from anyone who’s gone the out-of-state route: • How did you pick your market? • Did you use a property manager or build a local team? • What were the biggest challenges being remote? • Do you feel it’s been worth it vs. staying local? Also open to any advice from people who chose to keep investing in Boston instead. Appreciate any insights, just trying to get smarter before making my next move 🙏

    Going out of state can absolutely be worth it, especially coming from a high-cost market like Boston, but the real difference maker isn’t the city, it’s your team and your margin. Most investors who make the switch pick markets where the rent-to-price ratio actually gives them breathing room, then lean heavily on a solid property manager and contractor so they’re not trying to solve problems remotely. The biggest challenges are usually rehab oversight and trusting your numbers without physically being there, which is why a lot of people start in more stable Midwest markets where pricing is lower, and cash flow is more forgiving while you learn. Staying local gives you control, but often at the cost of thinner returns, so it really comes down to whether you want convenience or scalability.
    [email protected]614-418-6081
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  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    5mo
    Quote from @Joe Bouthillette:
    Hey everyone, I’m new to the group and excited to learn from you all. I’m currently based in Boston and own a rental here, but I’m trying to decide between buying another property locally vs. investing in an out-of-state multifamily for better cash flow. Would love to hear from anyone who’s gone the out-of-state route: • How did you pick your market? • Did you use a property manager or build a local team? • What were the biggest challenges being remote? • Do you feel it’s been worth it vs. staying local? Also open to any advice from people who chose to keep investing in Boston instead. Appreciate any insights, just trying to get smarter before making my next move 🙏

    Hey Joe, great question—this is a super common crossroads. Going out of state usually comes down to finding better cash flow, since markets like Boston tend to be more appreciation-focused. When picking a market, focus on job growth, population trends, rent-to-price ratios, and landlord laws, then zoom into neighborhoods. Most remote investors start with a solid property manager and build a local team from there—that’s key. The biggest challenges are not having eyes on the property and relying on others, but it gets easier with systems. A lot of investors feel it’s worth it for the cash flow and scalability. If you’re open to it, I’d check out Columbus—strong growth, tons of companies moving in, and you can still find deals in the $120K–$180K range that hit the 1% rule with good cash flow and appreciation upside. Happy to connect and answer any questions you have!



    [email protected]614-300-7535
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  • Evan HoppleBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2023 · 285 posts · 420 votes
    5mo

    Welcome @Joe Bouthillette ! Lower-priced markets are a lot more forgiving place to learn and grow as an investor. You can make mistakes, learn from them, and still come out ahead as long as you're diligent and building systems along the way. Investing is a muscle and lower price points let you rep it consistently instead of waiting around for the perfect deal and then expecting to execute at a high level.

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  • G. Brian DavisPro Member
    Investor · Hatboro, PA · Member since 2016 · 3k+ posts · 868 votes
    5mo

    Hi @Joe Bouthillette nice to meet you here on BP! Boston tends to be appreciation plus stability, but tough for cash flow. Out-of-state can give you better numbers, but only if you really understand the market and have a strong team.
    If you go remote, I’d pick markets based on landlord laws, population/job growth, and price-to-rent ratios, then spend most of your time vetting the property manager. A great PM makes it feel local, a bad one turns it into a second job.
    The biggest mistake I see is forcing cash flow in a weaker market just because the numbers look good on paper. I’d only go out of state if the fundamentals are clearly stronger and you’ve got boots on the ground.

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  • Nick Sansivero
    Rental Property Investor · Wilmington, NC · Member since 2019 · 69 posts · 51 votes
    5mo

    Hey @Joe Bouthillette, I have 2 out of state properties, for both of them I sort of backed into the market based on my criteria.. so I start with getting crystal clear on what I'm looking for (rather than starting with location), so: property type, purchase price, proximity to me, cash flow / appreciation goals, etc. Then I start narrowing down markets that fit.

    Curious where outside of Boston are you thinking? If you share some of your property criteria I can try to nail down a few markets for you. Let me know!

    1Reply
  • Garret Rumbea
    Inland Empire, CA · Member since 2017 · 151 posts · 79 votes
    5mo

    Hey @Joe Bouthillette welcome! My partners and I are based out of CA and invest in larger multifamily out of state, primarily in DFW. For us, we prefer having reliable boots on the ground. We partnered with an experienced operator/friend in the area, and still travel out when needed. On the management side, we’re very involved and in regular contact with our PM team throughout the week as well as weekly calls to review KPIs, leasing activity, capex items, etc. Happy to connect if helpful

    1Reply
  • Hersh ShahBusiness Member
    Realtor · Atlanta, GA · Member since 2016 · 122 posts · 81 votes
    5mo

    @Joe Bouthillette Welcome!

    This is a great question with an answer that depends heavily on your tolerance level. Ideally as an investor you want to be as hands off as possible while your team handles the operating and gets you involved for big decisions.

    Out of state markets tend to be less expensive than yours and while cash flow varies based on markets I believe you would find better options elsewhere if you were still investing for the long term.

    We serve a large percentage of out of state clients and for the vast majority of them, they wouldn’t lift a finger even if the property was in their backyard so the decision to go out of state was purely from a financial standpoint since their markets were more expensive and not sustainable for cashflow in today’s interest rate environment.

    Best of luck on the search for a new market!!

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    5mo
    Quote from @Joe Bouthillette:
    Hey everyone, I’m new to the group and excited to learn from you all. I’m currently based in Boston and own a rental here, but I’m trying to decide between buying another property locally vs. investing in an out-of-state multifamily for better cash flow. Would love to hear from anyone who’s gone the out-of-state route: • How did you pick your market? • Did you use a property manager or build a local team? • What were the biggest challenges being remote? • Do you feel it’s been worth it vs. staying local? Also open to any advice from people who chose to keep investing in Boston instead. Appreciate any insights, just trying to get smarter before making my next move 🙏

    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%

    Source: Fair Isaac Company

    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
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  • Aristotle Kumpis
    Specialist · Long Beach, CA · Member since 2011 · 879 posts · 398 votes
    5mo

    If the numbers and returns aren't doing it for you locally, then it's not a bad idea to look out of state or another market. I live in the Los Angeles area and I wouldn't invest here for several reasons. I invest out of state and have been for over 12 years. I do own several SFR's and a duplex. I don't have any interest in managing it or dealing with maintenance. So if you are the type that wants to be involved with everything, investing in another market won't work for you.

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  • Vijay FriedmanBusiness Member
    Miami, FL · Member since 2026 · 766 posts · 123 votes
    5mo
    Quote from @Joe Bouthillette:
    Hey everyone, I’m new to the group and excited to learn from you all. I’m currently based in Boston and own a rental here, but I’m trying to decide between buying another property locally vs. investing in an out-of-state multifamily for better cash flow. Would love to hear from anyone who’s gone the out-of-state route: • How did you pick your market? • Did you use a property manager or build a local team? • What were the biggest challenges being remote? • Do you feel it’s been worth it vs. staying local? Also open to any advice from people who chose to keep investing in Boston instead. Appreciate any insights, just trying to get smarter before making my next move 🙏

    @Joe Bouthillette

    For out-of-state multifamily, I’d pick the market first, then build the team before writing offers.

    The biggest difference vs buying local is that you need to trust your numbers and your people more. Property management, leasing, maintenance, and inspections matter a lot more when you’re not nearby.

    I’d compare local vs out-of-state based on:

    • cash flow after true expenses
    • property management quality
    • rent growth and vacancy
    • landlord laws
    • insurance/taxes
    • local contractor access
    • financing options
    • your comfort managing remotely

    I would not go out of state just because the cap rate looks better on paper. The market/team has to be strong enough to support the distance. 

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