Deciding on Where to Purchase that First Property

[Patrice Bocci]

Hi BP community! I am a newbie from Brooklyn, New York. I'm currently in the beginning stages of learning as much as I can about REI while putting a plan together. I'm having a hard time deciding where to purchase a property considering that my husband and I work in Manhattan.

We were thinking of buying outside of our market since it's quite expensive, like upstate New York or New Jersey. But since I am not familiar with areas outside of the 5 boroughs, I feel as though my options are limited. Since we live within the city, there's no need to have a car. This is another limiting factor because it's difficult to go further out than where our transit system can reach. I don't mind going too far, but I need to keep a reasonable distance in mind for my husband because of his commute to work (we decided that I will be the one doing REI fulltime) and I will do some contract work on the side.

I’m planning on reading the book Long-Distance Real Estate Investing by David Greene, but as a new investor, I think that it might be too soon to consider the option to purchase a property outside of NY & NJ.

What steps have you taken to decide on where you want to purchase your first property? How did you go about narrowing down the options to one specific area? All ideas and thoughts are welcomed!

[James Wise]

Originally posted by @Patrice Bocci:

Hi BP community! I am a newbie from Brooklyn, New York. I'm currently in the beginning stages of learning as much as I can about REI while putting a plan together. I'm having a hard time deciding where to purchase a property considering that my husband and I work in Manhattan.

We were thinking of buying outside of our market since it's quite expensive, like upstate New York or New Jersey. But since I am not familiar with areas outside of the 5 boroughs, I feel as though my options are limited. Since we live within the city, there's no need to have a car. This is another limiting factor because it's difficult to go further out than where our transit system can reach. I don't mind going too far, but I need to keep a reasonable distance in mind for my husband because of his commute to work (we decided that I will be the one doing REI fulltime) and I will do some contract work on the side.

I’m planning on reading the book Long-Distance Real Estate Investing by David Greene, but as a new investor, I think that it might be too soon to consider the option to purchase a property outside of NY & NJ.

What steps have you taken to decide on where you want to purchase your first property? How did you go about narrowing down the options to one specific area? All ideas and thoughts are welcomed!

 Welcome to the site Patrice. Many investors look at the turnkey markets when they invest out of state. Tons of turnkey markets out there. Many of these markets are very well represented by sellers & turnkey operators here on BiggerPockets. In no particular order I have listed some of the most popular markets for out of state investors

• Cleveland, Ohio
• Dayton, Ohio
• Toledo, Ohio
• Youngstown, Ohio
• Cincinnati, Ohio
• Memphis, Tennessee
• Birmingham, Alabama
• Kansas City, Missouri
• Saint Louis, Missouri
• Indianapolis, Indiana
• Detroit, Michigan
• Erie, Pennsylvania
• Louisville, Kentucky
• Milwaukee, Wisconsin
• Jackson, Mississippi

Each of these markets is popular with turnkey investors because of the low barrier to entry, high rental demand & high rent to price ratio. I recommend setting up keyword alerts for each area as they are discussed in the forums daily with advertisements posted in the BiggerPockets marketplace hourly.

One thing to note when looking at the individual markets, you can make or loose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. 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.