Would You Buy Your First Property Out of State?

Question

I’m considering buying my first investment property to rent out out of state in a hot market like Metro Austin or Denver. ***I have a flexible work schedule and get free unlimited airline tickets*** I do not want to buy in my home state of Massachusetts and am hoping to move sometime in the near future (but probably after buying). I could see myself living in a city like Austin or Denver if I can find work in one of those places.
Would you buy out of state right now if you were in my shoes? Would you say it’s too much trouble to be far away?

Lane Kawaoka · Answer

I started with turnkey remote rentals in 2009-2015 while working my engineering W2 job. Then went into syndications once my net worth went over 500k. For those people in San Francisco, Hawaii, Los Angeles, Seattle, Boston of primary markets which are NOT ideal for cashflow investing this is the only prudent way to go.

Timothy Douglas · Answer

It's definitely not too much trouble to be far away if you have a great team! A loyal person on the ground will make your life a lot easier. Let's talk some more about investing in the Austin area!

Allen Wu · Answer

@Blaise DoremusI’d start small in your backyard. But, if you want out of state just make sure you have a vetted team. I have a strong team in TX and they make my life easy. Can always move there later. You should run your market research and make sure you know your #s.

Brian Larson · Answer

Your situation makes sense to me. I own where I live but I'm planning to buy a pure OOS investment property in 2021. There are many other markets that make sense for people to invest. It all depends on your personal goals.

Jonathan Oh · Answer

@Blaise Doremus You're asking if it's wise to buy a rental property that you plan on eventually moving into. So your lifestyle choices come into play as well. For ex. do you want to settle in high-end neighborhoods that won't cashflow or are you ok with B-C neighborhoods that will cashflow? I think most people in these forums will agree that buying oos investment is a great idea. But buying your first home out-of-state is a tough question that only you can answer.

Joshua Noth · Answer

@Blaise DoremusInvesting locally certainly has it's advantages, but so does investing long distance. Most notably, you can go essentially anywhere you want, especially with the network that BP can help you achieve. You most definitely want to have a reliable team wherever you end up going, and doing your research and having a clear "why" for the market you select. With enough prep and learning, investing long distance, even as a first investment, can work well.

Brandon Goldsmith · Answer

If the numbers don't make sense in your own market then investing out of state can be a viable option. It really just comes to building your core 4 and creating a team. Your process is essentially the same as long as you choose a market that matches your REI goals. Good luck! @Blaise Doremus

James Carlson · Answer

@Blaise DoremusI think buying where you live is always smart. Get your feet wet with hands on experience. That said, if you're really intent on buying elsewhere, I get it. (I mean, come on, Denver's awesome. Great weather, awesome restaurant and bar scene, mountains are nearby, amazing parks, best beer selection in the country, diversified economy, population growth and the excitement that comes with that ... I could go on and on.)I'm actually working with a Denver buyer right now who lives in Connecticut but wants to move out here in a year or two. If that's a pretty sure plan for you, then hell yeah, buy now before prices continue to go up. You might also be able to buy it as a second home, which allows for 10% down (not the usual 20% for investment loans) and has a better interest rate.Be aware on the second home loan issue that Fannie and Freddie have some new rules coming down that might make it harder to get that second home loan. You'd want to chat with your lender about that.

Elin Trinh · Answer

Hi @Blaise Doremus. Like @Lane Kawaoka I live in Hawaii and it made sense to buy out of state. I am in escrow for my first investment property. I bought a property in Texas and I know the area is crazy but the numbers worked out. Best of luck to you!!

Patrick Flanagan · Answer

@Blaise DoremusWith the information out there today and all the books, there is no reason not too. I’m getting a hold of Norada real estate to buy a few turn key properties. As well as from REI nation