First property - Out of state rental or local flip?

[Michael Privitera]

Hello all,

I would like the opinion of BP on this. I am looking to purchase some rental property out of state. It will be either a 3 or 4 family unit. One of my best friends is going to manage the property for me. The reason I pick out of state is because it is more affordable versus where I live on Long Island. The property will return a positive cash flow of course, or else I wont be doing do it. Cash flow can range anywhere from $400/month to a $1,000/month depending on the deal. I do not have a portfolio at this time, so this property would be my first and also my first step into gaining bigger pockets.

Back here at home, I have a friend that is a commercial agent. He has been giving me some advice and tips since I started talking to him about it. In our last conversation he seemed to try and steer me away from the potential property and look more for a flip situation here at home. He's not against rental properties, but it seemed like he thought something like a flip or wholesale deal would provide "more of a splash." The initial outlay for the rental combined with the work involved in being a land lord and not having the property local may not be worth what I would get in retrun, even in the monthly cash flow is positive.

So I turn to my friends here. Does going buy and hold as a first step seem like a good/bad idea? Including out of state? Is my friend right in trying to look for a bigger splash to help build up some capital? He says a lot of the things I read on here, especially with respect to alleviating my fear of the expensive market I live in. He tells me that if I find a great deal, the money will follow.

Thanks all!