Out of State Investors: What would you choose?

[Jordan M.]

Hi BP community. My name is Jordan and I'm a new OOS investor (and as a new real estate investor in general). After reading as many books as I can and doing the best possible research I could do, I found myself with a couple of potential markets to invest in BUT ONE BIG QUESTION:

As an OOS investor, would you rather invest in an area you are familiar with, in which you have a network in place and people you can trust OR would you go for a market you are not familiar with, but have stronger ROI and CoC numbers? Both are profitable, btw.

Post your answer and if you don't mind your "why". Thanks!

[Andrew Zimmermann]

@Jordan M. I’m considering/struggling with the same situation. As a Boston investor, cap rates are low, cash flow scarce and very capital intensive. I like the basic concept of using equity built in a high cost market and then deploying it in a lower cost/higher cash flow market.

The compromise I’m coming to is focusing on out of state markets I have visited or lived in (there have been many in my case). But to everyone else’s point, building a good team and/or connecting with old contacts in those places are key. BP is a gold mine for assembling a team.