Do I sell my duplex in Cali to buy multiple doors in Midwest?

[Dan Hall]

I'm looking for advice, my wife and I have been blessed to inherit a duplex from my father in-law in his passing and share this with her sister so we are 50/50 partners.  My dilemma is that we own this 100% and cash flow $1200 a month so each party gets $600 a month once all costs are paid.  I know this hardly sounds like a problem but my thoughts are as follows;  The value is $450k so if we sell while California real estate is on this unrealistic high we pocket $225k cash and how many homes in the Midwest could we parlay this money with?  I see all these posts and podcasts regarding 65k deals in the Midwest with various ways in buying with cash.  I'm new to the rental business but am really looking for feedback from some of the pros as to what they would do if given the same choice. Is this a one in hand two in bush thing or should I pull the trigger? 

Thanks, Dan  

[Jim K.]

@Dan Hall

Well, wait a minute here...unless this is some sort of 1031 exchange, you're not going to end up with $225K, you're going to end up with significantly less. If this IS a 1031 exchange, you have to find multiple properties to take up as much of the $225K as you can within a small window of time, and you'll have to do it across the country.

While it is certainly possible to find cash-flowing deals here where I live and work for $65K, you're going to be stuck operating these rentals from across the country. That comes with significant problems, especially in the $65K range. Apparently for some people, those problems can be overcome, but they're going to involve turning over a significant amount of responsibility to other people and dealing with a lot of risk, both of which will eat hard into your bottom line. I would read up on long-distance investing before I did anything. This is not a matter of putting up a forum post and taking the plunge the next day.