First Out of State Deal: What you wish you knew before buying

[Jared Cheney]

Hello Bigger Pockets family, long-time podcast listener and forum reader, first-timer poster!

Quick back story: I bought my first rental property (1/1 condo) here in my hometown of San Diego 1 year ago. Ever since I learned about REI (about 3 years ago), I've loved the idea of consistent cash-flow rentals from a high-volume of doors. As is very well-known, San Diego is not known for it's cash flow but for it's appreciation. With that in mind, I've been preparing for the last year for my first out of state purchase.

After doing some research, my friend (partner) and I have decided to focus on Kansas City, MO. Specifically, SFR ~$70k or small multis ~$100k. I have read quite a few posts on here talking about how 'saturated' it is and how 'there are no more good deals' there thanks to the sheer number of people looking for such deals. From what we can tell, it still makes sense to buy there (even if cash flow isn't at it's all-time-best).

The point of this post is to ask those of you who have already made an out of state purchase, 'What do you wish you knew before buying your first out of state deal?' Any regrets? Anything you wish you could have done differently? And to those who are considering making their first purchase, what are your biggest concerns/worries?

As prepared as we are, there will always be a tad bit of fear. Or anxiousness. Or whatever you want to call it. Just like many of us are nervous about our very first deal, we too are nervous about our first one out of state. For us, this nervousness does not stem from being unprepared, but rather from the thought of experiencing something we have never experienced.

Any feedback here is welcome, and would be great to start a conversation. Also, if there are any Kansas City agents reading this, we will be coming out there in about a month or two and would love to have some solid connections with an agent who understands the REI side of things. Feel free to DM me, if that's you. :)

Thanks for reading and for any advice you might offer.

Happy investing!

[Spencer Cornelia]

@Jared Cheney I'm up in Cincinnati now visiting my first two flips which are 2,000 miles away from where I live.  My first one is going to be listed on the market tomorrow and all my friends/family love the video I posted on Facebook of the property and are really happy for me to make a little profit.

But here's what they didn't see...

Me basically going bankrupt.

My first flip was a large rehab project and the work was done poorly.  I found out at the end when the photographer and my agent showed up to take pictures only to tell me that we were months away from being complete and that a lot of the work needed to be re-done.  The last two months have consisted of me eating a poverty diet, not having fun because I can't afford to go anywhere, sleepless nights, having to ponder selling my car just to make loan payments, and seeing about $25k of profit go out the window.

So what would I have done differently...

1.  I would have relied on a couple people I trust to go visit the property to ensure the work was being done well.  And I need to have a tighter leash on contractors.

2.  Not used really expensive hard money.  I should have shopped for loans.

3.  Not take on multiple flips until I had A LOT of cash reserves

One thing I did right...

I bought deals with a lot of spread.