Guidance on out-of-state mutli-family units (2-4) Buy & Hold

[Beau Ibex Graham]

We live in southern California just north of San Diego. I'm a full-time paid firefighter. My wife is a full-time nurse. We are looking to begin investing in out-of-state real estate.

The original plan was to continue buying and fixing up single family homes to use as our primary residence for 2 out of 5 years then either to rent or sell depending on market conditions. Our plans have changed as we are looking to begin a family and the wife doesn't want to live in a construction zone, instead wanting a stable primary residence. So we turned to investing in hard money loans. These are a nice location for extra liquid money, but we would rather invest in multi-family properties that have a ROI of 10%-20% so that we could get our initial investment (20% down) back quickly to purchase another property. We value the passive income and tax-sheltering with this type of investment.

We plan on accumulating multi-family (2-4 units) homes out-of-state to buy & hold and produce a cash flow immediately with 20% down. Would like to get initial investment back quickly to purchase other properties.

We are seeking guidance and direction on investing in multi-family homes out of state. Essentially, how do we narrow down the U.S. to certain select cities & neighborhoods to find our niche.

Our experience is this:

We purchased a 2nd 1ba home in San Diego in 2014. Planned on turning it into a rental after fixing it up, but it had appreciated so much that took the net $150k profit in 2017 and moved in with parents in Fallbrook.

Currently involved with numerous hard money loans with returns from 9.5%-11.5%.

Also part of real estate investment group that is equity based and produces tax sheltered returns from 4%-6%.