How To Pick OOS Market

[Alexander Canha]

Hello! I'm new to REI and have decided I want to invest OOS for cash flow rentals. I have only lived in the Bay Area my entire life so have very little knowledge of other markets. I've been doing research for awhile now on different markets and have narrowed it down a bit, however I wanted to get the opinion of others! What key factors do you investors look for when picking a market to enter for cash flow (besides living in that market for a period of time)? Any and all advice welcome. Thank you!

[Filipe Pereira]

Hi @Alexander Canha! Here are some of my general thoughts regarding out of state investing:

Rely heavily on referrals, whenever you can. I personally advise against buying a property sight unseen and recommend that clients come out to Connecticut to see the property once it is under contract, and scheduled for an inspection. Don't buy something based just off of photos. Ask your agent to do a video walk through.

Don't get caught up on how far it is if you're already looking at markets that require plane flights. Seriously. The mindset that "I can get there that much quicker if it's in X market vs Y market is flawed." There will not be emergency plane flights for you, your PM should be there for emergencies. 

To me, the most critical part of your OOS strategy will be a great property manager. A great PM will make or break your investment in my opinion. Choose wisely.

Lastly, work with someone who has the heart of a teacher, not that of a salesman. It's important that you learn through the process and develop skills that will make you a better investor, as opposed to just going through the steps but not learning anything!

Talk soon,

Filipe