Choosing a Market

[Christopher D.]

I own two condos in Southern CA, which have appreciated well, but have low / no cash flow, so I'm looking at other markets out of the area - two college towns in particular - where I can get some higher cash flow.

College town #1: Looks like I can get returns there around 15-20% Cash-on-Cash ROI. My brother has lived there for 5 years, and has offered to help me scout out properties, property managers, etc. He knows the area and rental market well, but is not active in real estate and doesn't have any cash to bring to the table. In addition, he will not be able to manage the properties, as he works a full time job, lives 90 minutes away on the weekends, and will be moving at the end of the year. So what he is bringing the to the table here is strictly local knowledge (and a lot of energy).

College town #2:  I have no prior knowledge of this area, but looking at some of the listings and rents, it looks like returns could range anywhere from 20-48%.  It will take significantly more work to build a network there, and I have limited time to travel there, due to a full time job in CA.

Are the potentially much higher returns in College Town #2 worth forgoing the pre-existing local knowledge and network via my brother in College Town #1?  Would appreciate advice from anyone with experience!  Thanks!!

-CD