Invest in Southern California or Out of state?

[Ricardo Cristobal]

Looking to buy my next deal but prices here in Southern California is outrageous. I have been researching in other markets out of state, particularly in the MidWest. Would it be reasonable to just and stay put and invest in my local area in California or look for a deal out of state?  

Thank you for your time. 

[Logan Allec]

@Ricardo Cristobal SoCal can be a tough nut to crack for newbies.

A couple years ago I mailed out lots of letters to homeowners in LA County with no luck.

Then I tried rural Kern County and got a deal from a distressed homeowner in California City.

The margins were not as large as they would've been in LA or OC, but I was able to rent it out for 2 years before fixing it up and selling it for a decent gain.

Also, have you considered an owner-occupied small multifamily for your first deal?

You only need to put 3.5% down, so cashwise it won't get in the way of other real estate goals you may have.

My first deal was a 4-unit up I bought with FHA 3.5% in Santa Clarita.

I lived for free (as opposed to paying rent) + enjoyed cash flow + built equity. It was a great investment (and still is).

Good luck!