Out of State investing Tips and Warnings

[Chris Reyes]

Hello Everyone,

My fiance and I have started looking into investing out of state after months of debating of how we are going to expand our real estate portfolio. 

I am from Northern Colorado and our state has enjoyed a huge appreciation in the last 10 years. I personally have had 2 rental properties. The first one I had was bought in 2015 when I was 23 and ended up house hacking the property (had no idea at the time it was called that at the time). The second one I bought as a rental. 

Due to the great appreciation from the first property, I was able to sell it making a good profit without having to pay capital gains because of being sold within the 3 years of living in the property. And I have spent the last year investing into my knowledge of investing and building businesses. 

Since Colorado is still floating in the higher price ranges, we would like to go to other states that offer an opportunity to buy cash or bigger down payments when financing. I was hoping other seasoned OOS investors can shed light and or tips/warnings on what to look for in investing into OOS. 

Some questions I have include:

How do you screen real estate agents in other states?

Do you use the 1% rule in evaluating whether to buy the property, or do you use a higher minimum percent?

Do you prefer to use financing in the other state and use a bigger down payment, so you could save cash reserves for more real estate deals?

If I choose to buy a house cash, is it still advisable to use a real estate agent?

Any comments on this subject will be greatly appreciated in determining our first steps into investing into out of state. Thank you all for your time in advance!