Hey James,
The markets that you mentioned are the ones that a lot of the turnkey companies operate out of. They are very good markets. But, my fear is that they are getting crowded with investors. I do not know if my fear is valid. But I'm also, not trying to sell you anything. I own a few units in California, that are very appreciation dependent and I'm putting in my first out of state offers.
One thing I will note about the out of state market. If you go with a turnkey company they generally overprice the properties by about 10-20%. So you go negative equity right away. Consider this, You buy a property in Memphis from a turnkey property for 120,000. You put down 25% or $30,000 and everything is great, you start cash right away $200.00 a month. And you're happy with your investment. The big problem is that property's real market value,(I'm not talking about appraisal) is 100,000. but you purchased it for 120,000. So you overpaid by $20,000. You need 100 months or 8.3 years of positive cash flow to break even on your investment.
Out of state investments can be great. The positive cash-flow can be great. But lets say something happens and you need to sell the property in 2 years. That property you purchased for 120,000 is now only able to sell for 100,000. You cash flowed at $200 for 2 years so you made, $4800. But now as you sell you are going to lose $20,000. You need to hold that property for a really long time for it to become a positive investment.
But do your own due diligence. Vet your turnkey agency, vet the market, and vet the property itself. A lot of the new members on here from California don't have to money to invest here, so they look out of state, the easiest way to do so is through a turn-key agency. Just make sure that you are not overpaying for the property.
