Welcome to BP, Michael!
I live in Silicon Valley, and I specializes in real estate. I can tell you what people here have done to set themselves up for retirement. There are two types of investors here:
1. Buy or inherit and hold for a long time, then cash out and redeploy equity into potentially higher cash flowing properties or other investments.
2. Buy or inherit and hold all their lives while working the properties for income.
I've seen teachers, firemen, software engineers and all sorts of people utilize both strategies successfully. One way or another, however, the investors must work to pay down loans, increase rents and decrease expenses wherever possible. One way or another, they are building their net worth.
Building net worth is how you may possibly retire with fewer worries. If your retirement utterly depends on having adequate cash flow from your properties, any downturns will cripple you. AND you must maintain adequate reserves to take care of the disasters that may happen.
Most of my clients fall into the first group above. There plenty of other opportunities elsewhere, my clients are involved in institutional grade properties across the country. My recommendation if you choose to invest out of state is to choose cities in safe and economically diversified areas with above-average income and population growth. It can also be safer to diversify your investment properties across the country.
A very good source of local analysis, rereport.com.
So my advice- build your equity.
Best of luck! Leslie
