Buying first rental property out of state

[Jordan Wight]

I'm interested in getting into real estate investing. I would like to buy a home to buy an hold as a rental property. I work a full-time job, so I don't want to dedicate a ton of time to this, and would likely get a property manager. I've been investing in stock for several years, and would like to diversify by getting into real estate. I have the capital for a modest home in a suburban area. Here are my doubts, I would like some advice.

1. I live in San Francisco. It's way too expensive to buy here, and even if I had the capital, the purchase price would be way too high for the rent I could get out of it. So my question is, is it worth trying to buy a rental property somewhere I don't live? In the BP Podcasts I have listened to, he talks so much about seeing lots of homes, driving neighborhoods, going with the inspector, meeting the seller, etc. I don't see how any of this is reasonable if I have to fly somewhere to do it. Should I just forget real estate investing for now?

[Bjorik Mutize]

I personally think you are thinking correctly. And kudo's for doing that being so new. A lot of your peers starting out will try and force buying somewhere where it doesn't work, then end up pushed out the game in a harsh manner because of failing to calculate alternative options that will set them up for long-term. 

If your backyard doesn't work, find another back yard. There are plenty of good markets out there, you just need a few good steps first to get yourself ready to invest out of state. It is worth it. You don't want to wait until San Fran becomes cheaper because who the hell knows when that is.

First is to get educated and create your mindset on how you will do it. BP offers good resources on a book i like for out of state investing https://www.biggerpockets.com/store/long-distance-real-estate-investing-ultimate Read books like these and follow actionable steps.

Next i'd start exploring strong markets with good economic indicators. Pick one, research it's sub-markets and where the city itself is going. What are you seeing that make it good long term vs San Fran? Better rent to price? Whats going on with the different asset class? Less competition? etc. Resources like datausa.io are good. You can even like, pick 10 markets you like then narrow it down to 5, then 3, to 1 you want to concentrate on. While doing market research you can narrow down your specific criteria on what type of, in what area, producing what type of return for you.

Start networking with those in the market you are targeting and get a feel of who can help you out. Perhaps visit the market and meet those people. These are sub-forums on here for city-specific that you can meet these people. Reach out.

Pure basic advice, but the main thing is getting educated and transforming your mindset to thinking you have the ability to invest anywhere you want to that works.

Feel free to PM me if you would like to talk further.