To Diversify or Not to Diversify(markets)

[Nick Bennett]

We are currently doing a cash out loan for a couple of properties here in MA to provide the down payment on a few more multi-families( specifically units over 1000 sq ft with 3+ units for the property).

We are self managing for purposes of re-allocating those budgeted management funds to principle payments until we decide to distance ourselves and hire managers. We are specifically targeting full renovations that can use a bit of creativity and marketing to increase their value while keeping maintenance and repairs down in the short term for a more steady cash flow.

Anyhow- MA has been booming inside the 495 corridor- so much so that it doesn't present much opportunity for the buy and hold strategists like us seeking specific cash flow (12-15%), not so much looking for the equity at this time.

Question is- when buying properties are you more apt to focus in on a single city/town/radius or have you found benefits to spreading out a bit. Obviously managing can be more difficult with mileage but we are comfortable in that arena.  Of the two- why? do you go interstate? if so for which strategy? 

We both work busy jobs so our tolerance for renovations at this time even within an hour of us is almost too burdensome so out of state renos are out for us as well.

I must admit the desire to buy in a climate where snow is not an issue and the dollar goes further is awful tempting but I fear it might be greed driving that curiosity more than it is wisdom