Out of state investing (selecting market,financing,prop. manage)

[Sam Regan]

Hi everyone,
This is my first post. However, I do spend a ton of time on BP (hour a day at least) and have also listened to over 100 podcasts. That being said, I have done research on the forums just wanted to reach out and see if anyone can either answer some of the questions I have and/or point me to a previous post which has great info. Any help is very appreciated. 

Ok now for the meat of it. I desperately want to begin buying properties. I live in Santa Barbara, CA, where the median home value is $1,050,000. So my local markets and the surrounding markets are completely out of my price range. I am 22 years old, don't have a ton in the bank. Decent credit (around 700). Recently switched employers. Some credit card debt (will I need to pay off completely before getting mortgage?)

That being said I am resorting to investing out of state. Ideally I would like to buy something in the $80k-$100k range. I will not be able to pay cash. I will be investing for cash flow using a buy and hold strategy. I am open to SFR and multifamily, whichever works best for cash flow. I will definitely be using a property manager. Here are my biggest questions and maybe I can add some in as we go along.

-How to best find deals out of state? Should I contact a local real estate agent using the MLS? Should I be searching around on RedFin myself?
-How best to analyze out of state deals?
-How did you select a market to invest? Should I just select some growing cities and start doing some research on Redfin? For instance, can I just start looking in Austin/Dallas/Phoenix/Etc?
-Will these SFR's/multi families cash flow well even if using a property manager?
-How did you select a property manager? (There is a ton of info in the forums, just throwing this in as it is a concern of mine)
-Did you buy sight unseen? I most likely will not be able to travel out to see properties before buying.
-Are “boots on the ground” really that crucial?
-How to finance the early deals? How difficult is bank financing when it is out of state?
-Should I buy turnkey?

[Brie Schmidt]

@Sam Regan

-How to best find deals out of state? Should I contact a local real estate agent using the MLS? Should I be searching around on RedFin myself?  If you are going to DIY out of state, at least get a good agent.  You have no idea what the local laws or quirks are and you will totally regret not having an agent.  It's free, don't open yourself in that kind of risk

-How best to analyze out of state deals? If you have a good agent or TK company they will do it and you will just be verifying 

-How did you select a market to invest? Should I just select some growing cities and start doing some research on Redfin? For instance, can I just start looking in Austin/Dallas/Phoenix/Etc? It is going to depend on your goals, you mentioned you are looking for cash flow, not all markets outside of CA cash flow.  

-Will these SFR's/multi families cash flow well even if using a property manager? Depends on the specific market and what the numbers look like/  in some areas a $100k house will get you $800/mo in others it will get you $2k.  I would suggest looking under the "education" tab at the top and start learning

-How did you select a property manager? (There is a ton of info in the forums, just throwing this in as it is a concern of mine) Interview them, meet them, have backups that you interviewed

-Did you buy sight unseen? I most likely will not be able to travel out to see properties before buying.  I buy sign unseen, but I own 80 units and live 90 minutes away. If you are new to REI and absolutely cannot visit the market (huge mistake in my opinion) then at least hire a local investor to be present at the inspection and give you their opinion.

-Are “boots on the ground” really that crucial? YES.  I can't tell you the stories I have heard

-How to finance the early deals? How difficult is bank financing when it is out of state? Out of state is not the easiest but it can be done. Expect 20% down for SFH and 25% for MFH

-Should I buy turnkey?  It is a personal decision.  The people I talk to that are very happy with it are the ones that recognize some things are worth paying for vs trying to DIY and they spent time upfront vetting the TK provider and made sure they had the right expectations going into it.