Out of state investing

[Matthew Fitzgerald]

Hey BP world I'm a first time investor and I live in Southern California. I have been actively looking for properties here for about 6 months. I'm not having much luck, don't get me wrong there is plenty of inventory; single family homes and multi. The problem is the price of everything.... the rents won't cover the mortgage or it's priced so high for such a small return I don't want to touch it. Another thing I'm taking into consideration is the length of time I've been searching, I know six months is relatively a short period of time...... That being said, I have started looking out of state. I have found a market I'm interested in..... Cincinnati OH. The price's of the 2-4 units are well within our price range, and I believe I can get the return/ cashflow I am looking for. I know there are many challenges of a long distance landlord, I believe I can make it work.... I'm open to anyone's opinion, advice, and input Thanks

[Andrew Johnson]

@Matthew Fitzgerald I'm with @Jason Goretzki in that a good PM is your make vs. break.  Sure a great real estate agent can negotiate better for you, clear out the wrong properties, etc. but none of that makes a difference if the PM doesn't get quality tenants in there and work to keep maintenance costs "reasonable".  I always think "reasonable" as I don't want "low" to land me in a situation where the PM doesn't have to pay to trim the trees and they rub on the roof and hurt the lifespan of it.  

It also wouldn't be a bad idea to find a market where you have a cousin, went to school in, visited a lot as a child, etc.  Something that just helps you know just a tiny bit more than everyone else on BP looking at crime-rate heatmaps, population metrics, demographics, etc.  You'll never be a local but it helps to have a little more insight than a spreadsheet and a weekend trip can get you.

While it isn't based in empirical fact I always see the same cities come up over and over and over again.  Memphis, everything in Ohio, some talk of Indianapolis, etc.  What always makes me scratch my head is how, on earth, there's so much inventory (constantly) with a great real estate market and (yet) it's not all gobbled up by local investors.  Again, it's not based in "fact" at all but I'm always a little suspicious of the benefit of "group think".