BRRR in MA or Turn-key Out of State?

[Matt D'Arco]

Hey everyone. What would you recommend as the best strategy for someone who does not own any properties and lives in Massachusetts?

I started a business right in the beginning of 2020. Timing couldn't have been better as the business did well and has really taken of since. I save everything I make and only spend when necessary. My fiance is the same way with her W2 job; save the majority and spend on necessities. We're combining our savings to buy our first investment property. Massachusetts is pretty expensive compared to other states. Granted I'm looking at on market properties so I know there can be better deals to be found. But it seems like it can be tough to buy here in MA when you can buy nearly a turn-key property in another state for far less and still get a little bit of cash flow each month.

So my question is, should we focus more on more turn key properties out of state or should we look into some BRRR properties here in MA?

And if the recommendation is to look for rehabs in state, what is the best way to find deals? I don't need a step by step, but a resource/resources that I can use to educate myself on how to find in state deals would be great. My business is pretty hands on so I don't have all the time in the world to be driving to properties to manage a rehab but I could definitely find some time to do that. Combined, we have about $30k to work with in cash which leaves us with about $20k to keep in reserves.

Let me know what other info you need from me and I thank you all in advance for the responses.

Matt

[Jason Regan]

Hey Matt,

Investing in state or out of state has its ups and downs on both sides. With your down payment it would be hard to find many multis in Central or Eastern Ma that would work with that. You may have to look in the springfield market or out that way. I dont study or know that market, but I know there are investors out there. If you want value add I would BRRR in state first. Understanding a rehab and BRRRR when you are not near it can be stressful and harder to control. BRRR, of course, will add value faster to your RE portfolio. That being said this can be riskier if you dont know how to evalaute a property repair cost, holding cost, etc. Buying a turn key is safer and you know what you are getting, no surprises, but you wont create value as fast or be able to turn your money as a BRRR. You will probaby get about a 10% COC return with this strategy. This means you wont get all the money back you put into it for 10 years. I have done BRRRR here and am working on an out of state BRRR now. I think this would be the best way to scale with limited funds. Id love to talk and help anyway I can shoot me a private message.