Better to invest locally if you can?

[Joshua Sparrow]

I have $125k from an inheritance and am looking to buy my first investment property ASAP. My local market is steadily growing with tech and aerospace industries and has always been a big tourist destination. Being on the coast of California though, entry level prices are high.

I could potentially find a property 30 minutes inland for about $500k but wouldn’t have much left for rehab or reserves. I also have a great network of trustworthy people I could easily build a team with.

Would it be better for me to put all my money into a small property locally and utilize my existing network, or should I buy out of state and have more flexibility to BRRRR and scale up quickly?

[James Dainard]

Quote from @Joshua Sparrow:

I have $125k from an inheritance and am looking to buy my first investment property ASAP. My local market is steadily growing with tech and aerospace industries and has always been a big tourist destination. Being on the coast of California though, entry level prices are high.

I could potentially find a property 30 minutes inland for about $500k but wouldn’t have much left for rehab or reserves. I also have a great network of trustworthy people I could easily build a team with.

Would it be better for me to put all my money into a small property locally and utilize my existing network, or should I buy out of state and have more flexibility to BRRRR and scale up quickly?

Hey Joshua,
For your first project, I usually recommend getting something that you can drive to and check on regularly. If anything happens you should be able to get there to fix it so that it doesn't cost you an arm and a leg to coordinate work getting done. In addition to that I recommend doing your first project on your own. You want to be in complete control of the project, it tends to slow things down when there's more than one decision maker on a project. If you can partner, you should be looking to acquire private money lenders who don't mind being in second position. Try and get it so that the asset it yours alone.
Best of luck!