Looking to purchase my first investment property out of state

[Jessica Beard]

Hello Everyone- I am brand new and looking to buy my first investment property. I live in Long Beach, CA and buying around here isn't an option. I only have 10-12k to put down so I am looking in Cleveland area for my first multifamily. Does anyone have any advice or other promising location I could take a look at to get started? Thanks for your help- I have enjoyed reading many forums so far.

[James Wise]

Originally posted by @Jessica Beard:

Hello Everyone- I am brand new and looking to buy my first investment property. I live in Long Beach, CA and buying around here isn't an option. I only have 10-12k to put down so I am looking in Cleveland area for my first multifamily. Does anyone have any advice or other promising location I could take a look at to get started? Thanks for your help- I have enjoyed reading many forums so far.

 Welcome to the site Jessica. 

With your budget your looking at a property in the $45-$50k range. What that'll get you in the Cleveland area right now is a lower C-D class duplex or a lower C class single family home. For more information on what I mean when I say C-class or D-class check out The Ultimate Guide to Grading Cleveland Neighborhoods.

My personal advice would be to save up just a bit more money so you can get yourself into a single family home that's priced in the $65k+ range or a duplex in the $80k range.

It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.

• Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
• Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
• Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
• Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
• Make sure your property manager is a licensed real estate brokerage.
• Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.