The great California vs Out-of-State debate

[Ruben Parra]

Hi BP members!

This is just my second post and it feels great to have received such good feedback and support.

Since I don't usually carry around $100K in cash, my southern California backyard market can seem a little intimidating and out of reach for someone who is looking to invest in their first rental property. I think many of us start looking out of state as a better option to get our portfolio started. I have seen many passionate posts either advocating out of state for better returns, or defending the CA rental market as a stable cash flow strategy.

I'm personally looking for positive cash flow with somewhat decent returns  and the possibility of appreciation. I'm a little worried about another housing correction in California. Even Bakersfield seems like it could be in trouble with the oil job layoffs. I plan to stay out  any rehab or property management work myself so not having immediate access to the property is a risk I'm willing to take in any case.

Can anybody from CA who has tried both in and out of state markets share their experiences? What were the greatest difficulties you faced in each? What are the benefits or rewards you found in each one? And finally what advice would you give a new investor who is looking for their first property in an out of state market?

Then there's the question of certain markets or cities being better suited for multifamily units vs SFR's, but I'll leave that discussion for another day!