Is it possible to invest out of state? I need some advice.

[Gabriel Rodriguez]

Hello All,

First of all, thank you for such wealth of information in this place. I wanted to know if any of you have invested in properties outside of your state? I am from NY and investing in properties here is very expensive. I currently have 1 single family house rented, but my ROI is low for such property ($250K House - $250/cash after paying P&I/taxes) so I am looking for your advice. I currently have 100K in the bank doing absolutely nothing and I want to get the best bang for my buck in terms of properties/investment.

I figured that if I am able to invest 100K outside my state, I would be able to buy several properties and put them to work for me compared to just buying one here in NY.  I am still new to this and learning as I go, but I have decided that this is what I want to do and would like to dedicate myself to this to be able to provide a better future for my family.

Thank you and looking forward to your answers!

Gabriel

[Sam Elder]

I think I can provide some good perspective on this.  I live in D/FW, where a lot of out-of-state investors purchase.  Also, I am a mortgage loan originator that does a fairly significant amount of volume.  Add to that, I am a real estate investor with 36 doors.  Finally, I spent two years almost exclusively working with investors, providing nearly every type of financing.

My guess would be this: there is a very definable trade-off between local knowledge and access to properties that "check all of the boxes".  I frequently see people from out-of-state (we'll call them "Californians" lol) purchasing properties that meet their criteria but that are properties I wouldn't invest in, personally.  The properties are "better" by various metrics relative to properties in California, but they are in completely random, less than ideal areas, which highlights the lack of insight the investor has in the area.

The most successful investors I work with have partnered with true, local expert Realtor partners that have a very high awareness of the local market but that also understand investing.  They also take time to learn the area in more than just a superficial manner.

No doubt that there are "better" opportunities in areas where the numbers make more sense, but a weekend Wells Fargo "Investor Seminar" held in the Bay Area doesn't give you all the tools you need to successfully operate in a place with which you are totally unfamiliar (personal anecdote).