Out of State Investing: Several questions for those who do it.

[Jonathan Tea]

Currently living in California. Young but eager to learn. I have several questions. Assume you've found a property in another state, a turn-key property. It's listed as $75,000. I come up with a downpayment of $15,000 (20%).

Could I get financing in CA or would I have to get financing in the state the property is in?

Would it make sense to start an LLC if I don't plan on making real estate my full time job? What's the best method to take full advantage of the tax benefits of real estate.

I assume I'd have to pay state tax to the state that the property is in. Would I need to pay state tax in CA as well?

Are there any major questions that I'm not asking?

Thanks!

[Ali Boone]

Well since no one really seems to be answering your questions....I'll give it a shot!

Could I get financing in CA or would I have to get financing in the state the property is in?

You have to get a loan through a lender who is licensed in the state in which you buy.If you have a CA lender you like and they are licensed in the other state as well, that is fine. But more importantly than where the lender comes from, they hands-down need to be very investor-friendly. I know very few lenders who will actually get investment property loans closed. But if you work with the right ones, you're golden.

Would it make sense to start an LLC if I don't plan on making real estate my full time job? 

I personally don't think so, but there are arguments either way and you should consult with a professional before making a decision. But my reasons for saying no are-

https://www.biggerpockets.com/renewsblog/2013/08/1...

What's the best method to take full advantage of the tax benefits of real estate.

Buy rental properties. (Flipping and such don't have the same tax benefits)

I assume I'd have to pay state tax to the state that the property is in. Would I need to pay state tax in CA as well?

I'm actually not sure how this one works--my accountants do everything for me. I do recommend using an accountant (investor-friendly again) for rental properties so you do maximize the tax benefits owed to you. Things like TurboTax and such just don't hit them. 

I hope those help!