Closed on deal #1 in NJ! Searching for #2 (Local vs. Out-of-State)

I’d look at it less as “local vs. out-of-state” and more as where can you consistently buy the right deal and manage the risk?

Since you both have W-2s and your goal is a relatively small portfolio, I’d prioritize simplicity and quality over maximizing the number of properties. A local property that barely cash flows just because it’s easier to manage may not be better than an out-of-state property with stronger fundamentals and a proven property manager.

For out-of-state markets, I’d start with the fundamentals—population/employment trends, rent growth, purchase-price-to-rent ratios, taxes, insurance, landlord laws, and supply. Then spend just as much time researching the team. A great property manager, investor-friendly agent, contractor and lender can make a mediocre market workable; the reverse can turn a great market into a headache.

One other thing I’d consider: with only 10 or fewer properties as the goal, you don’t necessarily need to diversify geographically. Finding one market where you understand the numbers and can build a strong team may be more valuable than owning properties in five different states.

You’ve already done the hardest part—getting Deal #1 closed. Now I’d focus on developing a repeatable acquisition process rather than simply trying to find Deal #2. Good luck!