Out of State Investing and Asset Protection

[Fernando E.]

Fellow BPers, 

Hope you all had an awesome Father's day celebration

I've been in BP for about 2 years now and I really appreciate the spirit of collaboration and help in this community in my investing career. Two questions I would love to get your input

1. I live in the bay area and will be investing out of state (OOS), I know by reading in the forum that Midwest is the place to go, I originally planned to go to Indianapolis however the multi family houses that I encountered are on the older side as such will have a higher cost of maintenance, the realtor I am working with setup my automated search in the 46201, 203, 205 ranging in the $120 - 190K range.  My question, where do you invest?  Is Midwest still the place to go for OOS? How about Arizona? 

2. Asset protection is key concept that I picked up from Rich Dad Poor Dad book "Unfair Advantage" by Rober Kiyosaki, and my limited understanding tells me that I should have an LLC to protect my personal assets from the property, that is a cool $800/ year here in California. If this is a great practice that will save me in the long run, I will bite the bullet and pay the cost however I wanted to get your input on the LLC.

Very much appreciate your input guys,

Fernando 

[Ali Boone]

Hi Fernando.

1. AZ doesn't offer much for cash flow. Indy is probably only going to give you cash flow on MFRs in that price range that need major fixing up. How well-versed in this whole process are you? Are you wanting to fix up a property and do you know exactly what that price range offers and the risk factors with that? Typically the midwest isn't know for their MFRs to be the ones that cash flow...most of the midwest markets are more SFRs for cash flow.

2. Don't put the cart before the horse. And for detailed info on this- 

https://www.biggerpockets.com/renewsblog/2013/08/1... (and I'm a huge Rich Dad fan, so I am not just disagreeing with him for fun. What he says is accurate but not necessarily for your stage in the game (or mine)).

Hope that helps.