In state vs Out of state cashflowing

[Bill B.]

Hello
I've seen posts and profiles of people who own RE in multiple states. I've also seen posts and comments stating that anyone who rents out a property farther than easy driving distance from their own home should be in a rubber room and watched very carefully. I already understand the facts of being too far away to easily, and personally, address issues at the property. But, there are management companies who (for a fee) will take care of the property for you. Or, am I missing something about those services?

I'm seeking this information because I live in Southern California AND I am a newbie. Everything is being bid up within a half hour from where I live. Even in the areas where I do not want to buy. I'm contemplating cash flowing in WI, where I was born and where I have relatives (some basic support structure) Also, the market there seems to be where SoCal was in 2010-2011. i.e. a LOT of price cutting and REOs coming on market.

All that fails to mention that I can tie up several properties for a fraction of what I'd need to invest in one property in SoCal. (diversification should spread risk, shouldn't it?)

Please enlighten me. I'd like hear whys and war stories.

Thanks.

Bill