Benefits to investing in multiple markets

[Maxwell Lee]

Hi All, 

Just curious about the real benefits (we can get to the difficulties later) in investing in multiple markets. We have properties in various cities by default, but as far as intentional, strategic real estate investment, we have focused entirely on my home market of Jacksonville. 

Jacksonville still provides us with the type of investment we seek, but certainly not as awesome or abundant as it was a few years ago. I know the Jax market extremely well, so assuming I study and understand another market sufficiently but still not as well as Jax, is there any point in diversifying? If so, is it more beneficial for the other market to be of a similar type (low cost, cash flowing) just in a different region, or one that offers a different type of potential (like more dynamic appreciation)?

I'll toss out a few thoughts I've had: 

1) I get to write off more travel :p 2) I bring other investors with me. So if I can get comfortable, knowledgeable and adept in a new market then that would open up more options for my investor partners as well. 3) We are ever so slightly shielded from some catastrophic event occurring in my primary market.  

tl;dr, For those of you who purposely invest in many regions, why do you do it? 

Thanks!!

[Maxwell Lee]

Hey guys, a year later and I'm back! Took me 10 minutes to find this old thread :)

Anyway, as an update we diversified geographically by investing in Indy. We consolidated as well by selling the DC properties and next week the Tampa one will be sold, putting us roughly at a 60/40 split between Jax and Indy. Our activity in Indy, however, is nearly a carbon copy of Jax. sub 100k rehab properties, good cash flow, gentrifying neighborhoods where we expect to see above average, steady appreciation. I will continue to seek rentals and flips in both of these markets, but now I'm pondering the next step (if indeed one is needed)

I've described in a different thread my desire to reenter a major, potentially high-appreciation urban market. This is something I'll keep my eyes out for and perhaps be ready for during the next downturn. But in this thread my question is whether it would be worth the hassle to enter more markets similar to Jax and Indy. 

Anyone out there who has taken a DIY approach to REI (ie not through turnkey companies) and is actively investing in 3 or more markets (meaning not just holding rentals from once upon a time but still looking and buying in at least 3) care to chime in?

I don't want to do it for the sake of doing it, but rather because there are tangible benefits. It seems the cons are rather obvious (diverting my focus and attention, having to find another network of professionals I can trust, less economies of scale, more travel) and I'm not sure there are a whole lot of benefits. Fwiw, one of the reasons REI has been such a good fit for me is that I am an avid traveler and passionate about cities/urban planning. So I already spend a lot of time studying cities and their history, touring neighborhoods, analyzing how they've developed and progressed, and all that jazz. I've spent years doing this in dozens of cities across the country so it's definitely a passion independent of my passion for real estate.

Look forward to hearing the community's thoughts, especially from the folks investing in many markets. Thanks!!