There appears to be a “grass is greener on the other side” mentality going in in the real estate investing circles these days. What I mean by that is investors are looking for opportunities outside of their own local markets, looking across the country and even into other countries for the “best” market to get themselves in.
I am a big fan of the “acres of diamonds” mentality for new investors, meaning there are plenty of deals to get started on, right in your own backyard. But once you have established yourself as a viable real estate professional with a few deals under your belt, it may be time to expand your network. Investors do this for many reasons—diversification, expanding their brand, tapping into networks they may have, and capitalizing on areas with high potential for growth in the future.
What to Do When It’s Time to Expand to New Markets
We invested in our own area for years, building a portfolio that we were able to manage with our in-house team. Our investments were no more than 30 minutes from my office in downtown Trenton, New Jersey, and we did fine with that. We fund most of our projects through syndications with equity investors. Some of them weren’t comfortable with the greater Trenton MSA, and the deal size we could do here was only so large. For those reasons and others, we decided to expand our coverage and get into deals outside of our 30-minute radius.
Related: Looking to Invest Out-of-State? Here’s How to Pick and Analyze a City
In today’s video, I talk about what I’ve learned in our expansion outside of our local area into more regional investments. It’s imperative to do the right homework on these deals, especially if they are more than a drive away from your base of operations. There are certain factors that need to be considered that will make or break you, as well as work you need to do up front before you even start looking at deals. Watch the video to find out what those factors are and get some more detail on how to make an out-of-state multifamily investment successful!
I hope to get in some chatter with you in the comments down below, so please leave me some thoughts. Have you done an out-of-state deal already? How did it go and what homework did you do first?
Thanks for watching and have a great and profitable week!