Out of State Analysis Paralysis

[Brett Davis]

Hey Everyone! I am a newer investor from CA and am looking to buy/hold a small multi-family property (quadplex or smaller) out of state (cosmetic fixer would be preferred). I know the majority of markets out there are heavily in favor of sellers but I know there is still opportunity. I plan to finance the deal with a conventional loan (20% down payment) and am hoping to find something under $300k which I know limits my pool to choose from greatly. I would like to zero in on a decent market and then reach out to agents, PM's, lenders, & contractors (core 4). I then plan to fly there to tour the areas and meet/interview with the core 4 prospects. With all that said, I would like to get some opinions on good locations to invest and any tips on how not to drown myself in analysis. Due to my location in southern CA I have been focusing on TX, AL, & FL which seem to show some promise in regard to cash flowing properties. Any advice is greatly appreciated! Thanks in advance!

[Zander Kempf]

@Brett Davis Great decision looking to get into real estate investing. 

For your plan, if you are going to invest out of state, you definitely want to make you have a solid team of people you trust, including agents, property managers and maintenance people. Ideally you have multiple of all of these. I would also be sure to do an extensive amount of research so you can learn the local area, market trends, demographics, zoning ordinances, job market etc. Finding properties, especially investment grade multi families is rather competitive, so I would recommend finding some methods to source deals off-market.

Alternatively, find a real estate developer to invest your capital with. You can often own a share of larger properties with exceptional returns and have it professionally managed while you sit back and collect passive income. Even if you are new to the real estate realm, this is a great way to go to learn about the process and make some connections so you are better prepared to go off on your own. Feel free to reach out to discuss further.

Best of luck!