Investing out of state

[JR Hinds]

Is there anything I should consider about investing out of state? I purchased my first triplex in the same city as where I live. Now, as I'm looking to invest in another property, the numbers don't work well in my city (Portland, OR). It's going to be difficult to get anything to cashflow here. I'm seeing some properties in other states that seem to work better, but I'm concerned that I don't know the area and I don't have relationships there. Does anyone have experience and guidance? I'm not opposed to investing in another state. I just want to go in with my eyes open.

[Jay Hinrichs]

@JR Hinds 

  JR  being here in PDX market as well I have been investing out of state since 2000  and have owned 350 mid west rentals at one time ( lots of work)... having owned that many homes on and off for the last 15 years I have gotten one heck of an education.

The industry has gotten much better over the years and the good companies by and large have risen up and the bad actors while still out there are being weeded out.

The main thing someone from our area needs to understand is the supply demand issue. And the liquidity of out of state properties.. Its not like it is here in our market were when you want to sell something you simply list it on MLS it will be sold in less than 90 days for 98% of ask for cash either cash buyer or finance buyer..

So when you go out of state you need to dig into these things a little more than having a west coast mentality to how real estate is bought and sold.

If you think about market dynamics 90% of rental properties in our market are bought by locals... Were in the Cash flow markets that changes drastically..

One thing you may want to consider is buying in a market were you may one day want to use the property for vacation or retirement  Like Vegas Phx Florida type properties. Or even Central Oregon or Central WA over to Idaho panhandle.

However one thing that most in the business will recommend as an out of state investor you want to buy on the upper end of the market in a given city as opposed to the very bottom end... The bottom end of many of the cash flow markets are very very tough to deal with and out of state investors mortality rate for getting completely wiped out is quite high... If you think of our market here in PDX you cannot drive down a street and see 5 board ups per block.. you might see a ugly house and maybe a board up 1 every 20 blocks.. but in the Mid west in some of the towns there is just a big oversupply of homes. 

So choose wisely there are 20 to 30 markets to choose from and well over 100 TK companies