New to investing- need help please!

[Edrin Shamtob]

Hi I am a new investor from souther California. I am looking to invest in a out of state market as southern california is very competetive with high property cost. Do you think its a smart idea to buy my first rental property out of state? 

[Mike D'Arrigo]

@Edrin Shamtob Some people will always tell you that you should only invest in your own back yard but unless your own back yard is compatible with your  investment goals, then you have no choice but to go oout of state. I always say that you don't buy a stock because the companies headquarters is in your home town and you can drive buy and make sure the employee's aren't trashing the building. Real investors focus on the financial return on the asset regardless of where it's locate and real investors don't spend time driving around looking at their properties. They hire the best property managers to do that for them. Good property management is key to making out of state investing work but know the areas you're investing in. The biggest mistake people make is getting lured in by the promise of phony returns in low end neighborhoods. No matter how good your PM is, they can't convince good tenants to live in bad neighborhoods. We work with a lot of out of state investors in the Indianapolis and Kansas City markets. These can be great cash flow markets but you have to know which areas perform and which don't. I wrote a report on how to invest out of state which you can find on my website if you want to check it out.