NYC Native Looking to Invest Out of State

Bronx, New York
Out of State Investing
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NYC Native Looking to Invest Out of State

Deondrae Francis
New York City · Member since 2026 · 12 posts · 4 votes

Hi,

I'm in my early 20s. Landed a solid SWE job. I have 100k saved up. I live with parents in NYC. Low expenses. I have been in the market for 1 year now. I started looking for Multi fam units in NJ around 550k. Price's increased. Now scarping the pot for SF in CT, NJ, or upstate NY for 450k or less.

That search is going nowhere. Hence, I am interested in doing investment property out of state. Any locations in mind where I could buy for a price that can earn decent cash flow after property management fees?

I'm looking for a area 1-2.5 hrs away. Ideally 2 units or a area I can rent rooms.

Am I doing things out of order?

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Divin KanyamaBusiness Member
Accountant · Seattle, WA · Member since 2025 · 644 posts · 272 votes
2w

You are not necessarily doing things out of order, @Deondrae Francis I would avoid choosing a market simply because the purchase price is lower. Start by defining your return target, financing limits, reserve requirement, and how actively you want to manage. Then compare markets using realistic rents, taxes, insurance, vacancy, repairs, capex, utilities, management, and local landlord rules—not just the listing price.

For a first property, being within a few hours can be valuable while you build experience and a reliable local team. A small multifamily or owner-occupied house hack may offer better financing and lower operational risk than remote room rentals, which can be management-intensive and may face zoning or occupancy restrictions. Keep substantial reserves after closing, interview managers before making offers, and underwrite several actual deals in each candidate market. If none work conservatively, continuing to save and waiting is a valid decision—not falling behind.

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  • Aaron Zucker
    Realtor · New York, NY · Member since 2019 · 71 posts · 28 votes
    2w

    You're not doing it out of order — your budget is just telling you the truth about the NYC metro. With $100K saved, by the time you cover down payment, closing costs, and reserves, a $450-550K purchase is basically all of it. That's why the search feels like scraping.

    A few practical points from working this market:

    1. At 1-2.5 hours from the Bronx you're not really going 'out of state' — you're in drivable territory, and that's an advantage on a first deal. Hudson Valley (Newburgh, Poughkeepsie), parts of CT, or the Lehigh Valley in PA will teach you more than flying to a market you've never set foot in, because you can actually walk the properties and meet your team.

    2. Go 2 units over single-family room rentals. Renting rooms in a single-family is a zoning and management headache in most of these towns, and the income is fragile — one bad tenant is your whole rent roll. A duplex underwrites clean, and if one unit empties you're not at zero.

    3. The biggest decision you haven't made yet: owner-occupy or pure investor loan. If you'd live in one unit for a year, your down payment drops dramatically and that $100K stretches much further. If not, budget 20-25% down on a 2-unit, which puts your real ceiling closer to $350-400K once you keep 6 months of reserves. Do not spend the reserves — that's where new landlords get hurt.

    4. Underwrite every deal with management at 8-10% even if you plan to self-manage at first, plus vacancy, and use real tax and insurance numbers. In NY/NJ/CT, taxes and insurance kill more 'cash flow' deals than purchase price does.

    Pick ONE market, drive it a couple of times, and analyze 10 duplexes a week in it. Depth in one market will find you a deal faster than skimming five states.

    1Reply
    • Deondrae Francis
      OP
      New York City · Member since 2026 · 12 posts · 4 votes
      2w

      Thanks for responding! This seems AI-ish. Regardless, good info, I had an idea that SF room renting will be a nightmare but this highlights it further. The Owner occupancy portion won't work as many jobs are pushing for in-office attendance

      0Reply
  • Andrew PostellPro Member
    Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
    2w

    @Deondrae Francis yeah, I know what you mean. When I lived in NYC I also had to invest out of state. My recommendation is to ALWAYS choose whatever city you have the most trustworthy contacts in.  Keep in mind that you may never see your asset.  That's an ENOURMOUS amount of trust/money to put into a stranger's hands.  What I mean here is that if you know someone in a different city...but that city may not have as good as numbers as this other city...then stick with the city where you know people.  When I lived in NY I invested in Jacksonville, Florida. Not because it had the best returns in the US...but because I knew people there already. One wrong move, one wrong contractor, one wrong vendor…will erase any "benefit" one city has over another.  Your network is the most important piece for any potential returns when you invest out of state.

    2Reply
    • Deondrae Francis
      OP
      New York City · Member since 2026 · 12 posts · 4 votes
      2w

      This is awesome advice, thanks Andrew :)

      0Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    2w

    Welcome, Deondrae. Saving $100K at your age while living at home is a real head start, and you're not doing things out of order. The NJ and CT search sounds like it is mostly a price problem, not a you problem.

    One thing I'd add to the drivable-market advice above: if the 1-2.5 hour radius keeps coming up empty, the numbers can look very different once you widen the lens. In my experience, Midwest markets like Columbus are still finding single families in the $120K-$180K range, so the same down payment covers a much bigger share of the purchase and leaves real reserves. The caveat is that you'd be running it remotely, so the team (agent, lender, manager) matters more than the property.

    A house hack is also worth pricing out even if it feels far off, since low down payment owner-occupant financing changes the math completely.

    I enjoy networking with investors working through this, so feel free to connect and I'll see where I can help.

    [email protected]614-300-7535
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  • Divin KanyamaBusiness Member
    Accountant · Seattle, WA · Member since 2025 · 644 posts · 272 votes
    2w

    You are not necessarily doing things out of order, @Deondrae Francis I would avoid choosing a market simply because the purchase price is lower. Start by defining your return target, financing limits, reserve requirement, and how actively you want to manage. Then compare markets using realistic rents, taxes, insurance, vacancy, repairs, capex, utilities, management, and local landlord rules—not just the listing price.

    For a first property, being within a few hours can be valuable while you build experience and a reliable local team. A small multifamily or owner-occupied house hack may offer better financing and lower operational risk than remote room rentals, which can be management-intensive and may face zoning or occupancy restrictions. Keep substantial reserves after closing, interview managers before making offers, and underwrite several actual deals in each candidate market. If none work conservatively, continuing to save and waiting is a valid decision—not falling behind.

    [email protected]
    WEMBO CPA532 Reviews
    WebsiteView Page
    2Reply
  • David C.
    Real Estate Consultant · Member since 2026 · 7 posts · 1 vote
    2w

    You should run the actual PITI on a $350k duplex at today's rates before you pick a market.

    at 7% with 20% down that’s roughly $1,860/mo just on the mortgage, add taxes and insurance.... a duplex in the lehigh valley might be $4k/yr in taxes, same price in upstate NY could be $8-9k.

    that difference alone is $400/mo and it’s the thing that breaks most first deals from out of state. i’d honestly pick 2-3 markets, pull actual tax records on sold duplexes, and see where the math actually works before you start driving around.

    1Reply
    • Deondrae Francis
      OP
      New York City · Member since 2026 · 12 posts · 4 votes
      2w

      I will give this a try. Do you suggest any other areas besides Lehigh valley?

      0Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    2w
    Quote from @Deondrae Francis:

    Hi,

    I'm in my early 20s. Landed a solid SWE job. I have 100k saved up. I live with parents in NYC. Low expenses. I have been in the market for 1 year now. I started looking for Multi fam units in NJ around 550k. Price's increased. Now scarping the pot for SF in CT, NJ, or upstate NY for 450k or less.

    That search is going nowhere. Hence, I am interested in doing investment property out of state. Any locations in mind where I could buy for a price that can earn decent cash flow after property management fees?

    I'm looking for a area 1-2.5 hrs away. Ideally 2 units or a area I can rent rooms.

    Am I doing things out of order?

    I would recommend Ohio. I am from CT, and the home prices are much more affordable here.

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    2w

    The Real Estate Crash of 2008-2010 caused real estate prices to crash across the country - but didn't affect rent amounts. This caused a historically unique opportunity for investors - they could buy Class A properties and immediately cashflow when renting them out.

    This couldn't last forever, and it didn't, as excited new investors drove up prices. 

    Eventually, Class A property values increased to the point that even increasing rents didn't allow them to cashflow upon purchase.

    So, the flood of new investors switched to buying Class B properties. 

    COVID created a chaotic spike in both the sale & rental markets, attracting even more new real estate investors. According to , in December of 2023, almost 30% of home sales were to investors!

    Investment also spiked in Class A Short-Term Rentals (STR) and investors started paying higher and higher prices based upon anticipated STR rental rates, that exceeded sustainability based upon Long-Term Rental rates (LTR).

    Now we're seeing investors pouring money into buying Class C rentals - but, many are getting burned.

    In our experience & opinion, the main determinant of property Class is not location or even property condition, those are #2 and #3. The #1 determinant is the Tenant Pool.

    If you don't believe us, try putting several Class D tenants in Class A apartment buildings and watch what happens. Or try the reverse - rehab a property in a Class D area to Class A standards and try to get a Class A or B tenant to rent it.

    Unfortunately, many newbie real estate investors are jumping into buying affordable Class C rentals - expecting Class A results.

    In our opinion, Class C tenants have FICO scores from 560 to 620 - where their chance of default/nonpayment is 15-22%. See the chart from Fair Isaac Company (FICO) below:

    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%

    According to this chart, investors should use corresponding vacancy + tenant-nonperformance factors of approximately 5% for Class A rentals, 10% for Class B and 20% for Class C.

    To address Class C payment challenges, many industry "experts" are now selling programs to newbie investors about how Section 8 tenants are the cure. If only it was that easy. Yes, the government pays the Section 8 rent timely, but more and more tenants are having to pay a portion of their rent. Then there are the challenges with Section 8 tenants paying utilities and taking care of their rental property. 

    Investors should fully understand that Section 8 is not a cure-all for Class C & D tenant challenges, it's just trading one set of problems for another.

    We see too many investors not doing enough research to fully understand all this and making naïve investing decisions.

    Once you understand the above, you still need to find a property. You’ll have to do what investors did before the Great Real Estate Crash:

    1)      Evaluating 100 properties, to identify 10 to make offers on, in the hopes one seller accepts.
    - Yes, this takes a lot of work!

    2)      Network with wholesalers who can bring you “deals”
    - Many wholesalers are also newbies who have no clue what a real deal is and are just time-wasters.
    NOTE: We often see wholesalers re-marketing MLS properties at HIGHER amounts!

    3)      Start using your own personal network to find motivated sellers.
    - Start posting on your favorite social media site what you are looking for – not once or twice, but CONSISTENTLY for 6 months! Give updates on properties you’ve looked at or analyzed to keep your audience engaged, so when they stumble upon a potential situation, you are the first one they think of.

    Good luck!

    [email protected]248-209-6824
    Logical Property Management4.9469 Reviews
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    1Reply
    • Deondrae Francis
      OP
      New York City · Member since 2026 · 12 posts · 4 votes
      2w

      Thanks! Absolutely great advice. I have seen the new wave of section 8 renting trend. Not a fan of it either. Guaranteed government payments does not mean guaranteed quality tenants. The headache and cost of cleaning up after vacancy is not worth.

      0Reply
  • Gregory AcsPro Member
    Lender · MD · Member since 2025 · 260 posts · 97 votes
    2w

    You're not necessarily doing things out of order. With $100K saved, I'd start by comparing a few markets based on rental demand, property taxes, insurance, and realistic cash flow after management fees.

    I'd also look at financing requirements before narrowing down properties, since investment loans typically require more money upfront than owner-occupied financing.

    Are you planning to live in one unit initially, or would this be strictly an investment property?

    1Reply
    • Deondrae Francis
      OP
      New York City · Member since 2026 · 12 posts · 4 votes
      2w

      Strictly rental property. I've talked with a lender I'm familiar with. Will search markets.

      0Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2w

    @Deondrae Francis

    Hi Deondrae. I wouldn't give up on house hacking - I'd keep looking. If it takes a long time, so be it. It's a very powerful way to build wealth. The goal is not to 'cash flow' but to repurpose your housing payment, and ideally break even when you move out. Yes, you can buy a rental property first - I did - but you also want to make sure that it won't impair your ability to buy a primary.

    With respect to out of state- I like that you're trying to stay within a couple hours. I'd just caution you that 1. rent by the room can be a tough strategy, with more drama and higher risk than a traditional LTR; and 2. what seems to get overlooked these days on BP is that buying a rental - ANY rental - and putting it into service is expensive, as you'll have thousands and thousands of dollars in costs and expenses - closing costs on the purchase, rent-ready costs, lease-up costs to get rented out, repairs, turnover, etc.

    These costs seem to get totally ignored when people tout their "returns." Factor these in, and your return in year 1 is: zero or negative. Year 2: zero or negative. Year 3: zero or negative. You get it. It's only after many years that you truly start to 'cash flow.'


    -Hope this helps

    -Not written with AI

    0Reply
    • Deondrae Francis
      OP
      New York City · Member since 2026 · 12 posts · 4 votes
      2w

      It does help thank you @Nicholas L. :). I'm going to take your advice and do a dual search. Keep looking for SF where I could potential house hack nearby. And do for rental property. From what I'm seeing it's harder to find a high cash flowing property starting off unless you have a lot of capital, unlike myself, and I am fine with a small cash flow (200 minimum) to begin with. I find that the equity gained on the property and as you mentioned slowly paying down the mortgage until cash flow is flourishing is the route to go. Having that money sit in my saving is not doing any justice hehe

      1Reply
  • Matthew MorrowBusiness Member
    Investor · PA - NY - NJ · Member since 2019 · 927 posts · 334 votes
    2w

    @Deondrae Francis you're not doing it out of order. The budget and the market just aren't lining up in north Jersey right now. Living at home with $100K saved puts you ahead of most people starting out. A couple of hours from the city, the Lehigh Valley and other parts of eastern PA still have small multifamily, generally with lower taxes than NY or NJ. Wherever you land, I'd pick somewhere you can actually drive to, because being able to show up matters a lot on the first deal. Have a local agent set up a saved search for 2-4 units so you see them the day they hit. Best of luck getting started.

    [email protected]484-791-6200
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    • Deondrae Francis
      OP
      New York City · Member since 2026 · 12 posts · 4 votes
      1w

      Very insightful. I will take your advice and start searching somewhere within driving distance. Only caveat is that the listings seem to be moving slow in these areas..

      0Reply
  • Ryan BrownPro Member
    Real Estate Agent · Louisville, KY · Member since 2022 · 93 posts · 31 votes
    2w

    @Deondrae Francis I'll be upfront: Louisville is outside your 1-2.5 hour drive. But it's about a 2.5 hour nonstop from LaGuardia with several flights a day, so you can fly in in the morning, walk 5 or 6 properties, and be home that night.

    Why I bring it up is that $100K actually goes somewhere here. I pulled our MLS this morning and there are 52 duplexes for sale in Louisville with a median list price around $260K, and half are $250K or under. Fourplexes are running around $394K. That's 20-25% down with real reserves left over, instead of every dollar you've saved going into one NJ deal.

    On renting rooms, I'd push back a little on avoiding it entirely. I own two rent-by-the-room buildings here right now and they work, but they're a lot more hands-on than a regular rental: more turnover, more small issues, and you need clear house rules and someone local who actually knows how to run rooms. For a first remote deal I'd buy a duplex that could work by the room later, rather than a single family that only cash flows if every room stays full. I also sold a 10-unit on E College St in August, so I've done this at a few different sizes.

    If you want, tell me your target cash flow and I'll pull 5 duplexes that are on the market right now and run them with real taxes and insurance. Even if you end up somewhere else, it gives you something to compare against.

    [email protected]502-889-0122
    0Reply
    • Deondrae Francis
      OP
      New York City · Member since 2026 · 12 posts · 4 votes
      1w

      How do you deal with the high crime rate in Louisville?

      0Reply
  • Shawn McenteerBusiness Member
    Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
    1w

    Hi @Deondrae Francis Is house hacking an option for you? The right parts of New Jersey can be great for proximity to NYC. House Hacking will allow you to put very little down and not have to worry about traveling long distances to check on property. $500k property is $25k out of pocket(maybe less) if you house hack. OOS will be $50k for a $250k property. There is a lot that more that works in your favor staying local and owner occupying

    973-975-3895
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    • Deondrae Francis
      OP
      New York City · Member since 2026 · 12 posts · 4 votes
      1w

      I'm open to house hacking. NJ goes by township for house hacking legally. It's pretty tough getting a home within budget for those areas that do allow for it. What are the areas that allow for it?

      0Reply
  • Arman AhmedPro Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 969 votes
    1w
    Quote from @Deondrae Francis:

    Hi,

    I'm in my early 20s. Landed a solid SWE job. I have 100k saved up. I live with parents in NYC. Low expenses. I have been in the market for 1 year now. I started looking for Multi fam units in NJ around 550k. Price's increased. Now scarping the pot for SF in CT, NJ, or upstate NY for 450k or less.

    That search is going nowhere. Hence, I am interested in doing investment property out of state. Any locations in mind where I could buy for a price that can earn decent cash flow after property management fees?

    I'm looking for a area 1-2.5 hrs away. Ideally 2 units or a area I can rent rooms.

    Am I doing things out of order?

    Hey Deondrae, you’re not doing things out of order. Sometimes looking beyond your backyard opens up better opportunities. I’d definitely consider the Midwest, where your $100K could go further and you can find duplexes and small multifamily properties with solid cash-flow potential. The key is finding the right deal and a reliable local team to manage it while you’re in NYC.

    [email protected]614-418-6081
    1Reply
  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    1w

    I lived in NYC for 30 years before moving out.

    The great thing about NYC(in my opinion, and hopefully it applies to you), is the ability to make a good salary and to make connections with those that have money.

    The money you earn in NYC can go a very long way in other parts of the country.

    When I first started investing, I looked at areas that were 1-2 hours away and I picked the Lehigh Valley. I did good with my investments so I can't say that I regret it. However, I think a nearby property 'shackles' you.

    I would travel the few hours back and fourth to the property. In reality, I didn't know much, if anything was wrong by looking at items(HVAC, Furnace, etc).

    I think you should look anywhere around the country. Pick an area that you feel will pick up and people/jobs will move to instead of pricepoint.
    Ideally, it would also cash-flow

    [email protected]917-280-8544
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    • Deondrae Francis
      OP
      New York City · Member since 2026 · 12 posts · 4 votes
      1w

      I will take this into consideration :D

      0Reply
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