Buying Out of State in the KCMO area, from Bay Area CA

[Kevin G.]

Hello all,

I know first time investors post the same generic questions here all the time , and this may be another one , but I'm very interested in investing in real estate. I have been researching a lot, reading books, and really trying to educate myself. Currently im 25 and renting an apartment here in the Bay Area, CA. My market is pretty tough for cash flowing properties. My original plan was to buy a home, live in it for 2 years with my fiance, and then move and rent it out in hopes of buying something else. Next option Is to house hack with a duplex. There is very little selection in my area for duplexs so I'd have to look outside of town (1.5 hours away in the Sacramento Area) adding a long commute for me. I know if the deal is right the commute would probably be worth it.

I'm also interested in investing out of state due to my market being so high. Specifically Missouri, outside Kansas city. My sister lives in this area as well. The Rents seem very strong along with appreciation. I have enough to put 20% down on a property , and I'm willing to put in the work to find a PM, good realtor, and overall a good team. Eventually I plan to leave California but not until later down the road, and I'd like to live near my sister. Having my sister and her husband near the properties would be beneficial as well. 

Is this a wise choice for a first time REI in the Bay Area ?

[Mike D'Arrigo]

@Kevin G. It may not be only a wise choice, it might be your only choice unless you want to house hack which is an appreciation and equity play, not a cash flow play. For me personally, I would not deal with a 1 1/2 hour commute to invest in Sacramento when you can go out of state with much better cash flow. You have to consider your quality of life. Kansas City is an excellent market. It not only cash flows well but is experiencing very strong appreciation similar to what you see in CA. Median home prices are up 19.9% in September YOY and 8.6% year to date. KC also has good population growth, job growth and a modern, diverse economy. The key to any out of state investing is working with the right people that you can fully trust. We've been active in the KC market for 8 years and Indianapolis for 10 years. Feel free to contact me if you want some help.