Cash or Leverage for first out of state purchase

[Derek Willis]

My wife and I are looking to make our first out of state rental investment property and wanted to get opinions with using cash or leverage. We are selling our existing investment home to get the equity out of it since it has horrible ROI. We will have plenty of cash once that is done to be able to use all cash on next purchase and have some leftover but we do want to be aggessive and purchase as many as possible as fast as possible. We were thinking of buying the first home out of state with cash and then once that is up and running and able to see real numbers, refi it to leverage towards second purchase. Our thought behind it is that we can feel out the new market area and as we build new relationships we won't have to worry about mortgage payments if we hit any bumps. Then once those contacts are made we use that home to purchase 2nd with leverage and then continue leveraging to grow quicker. Would love to hear thoughts of others who have done this before. Thanks