@Kathy Diamond
I agree with the comments by Nicholas, Bill and Stuart. If you don't already have a primary residence, could you buy a property and house hack? I invest in S.F. Bay Area, did a local renovation where I was able to do walk throughs with the contractor, and have pretty good control of this property, can check on it multiple times a week. I did a brief search of the Yonkers area and I know it's a high cost of living area.
Like @Nicholas L. said, maybe look within a reasonable driving distance from where you live, is there any city or state where you have family or friends that live there where you could travel to frequently and they could keep on the property for you or somewhere you visit a lot.
I used to live in the Indy metro area so I have friends there. I rented out the house I lived in (in nice suburb with low crime and great schools) - this Class A property is doing well 5 years rented so far, but the property tax increases are reducing my cash flow. I knew the area but not down to a detailed level. The other markets I considered were Cincinnati, Cleveland, Memphis, and St. Louis. For the last 3 cities, I talked to turnkey companies whose numbers on paper looked good but decided not to go with those cities since I knew nothing about them. So I stuck with Indy.
The 1% rule is flawed. I closed on a SFH that was at 0.88% rule in Indianapolis. This Class C SFH was supposed to cash flow $176 on paper at 6.99% interest rate. Purchase price was $130,000 supposed to be "turnkey" (bought with an agent not a company). I had a full inspection and there were some minor repairs done before the tenant moved in. For 7 months straight I was -$300 to -$700 a month because of repairs called in by the tenant (tenant wasn't breaking things as confirmed with Property Manager).A 100 year old renovated house is going to have problems. Also the brand new AC unit put in by the seller was stolen before tenant moved in - thieves climbed a 7 foot fence. For now it seems to have stabilized (owned a year). I also closed on another Class C home in Dec. 2023 - not rented out yet, trying to figure out whether to rent it out or sell and cut my losses.
I've recently talked to many investors in California and one in NYC, at in person meet ups and by phone/Zoom. I think it's at least 50% chance that you'll lose money buying in an unknown inexpensive market. My story isn't even that bad compared to another CA investor who bought 2 apartment buildings in the Midwest Class C and was told property values would go up with gentrification. She waiting for things to get better but after 3 years sold both buildings because of the non-stop repairs and tenant issues.
The reality is that you're buying in difficult market with high prices and higher interest rates. Many investors have had a really good run up from 2008 to 2022. My properties I acquired before 2013 are doing well. I should have left at that - I listened to too many people to acquire more doors and it will "cash flow". If you decide to buy OOS I'd recommend to fly out to the area. Would you live there? Is it run down? What are the surrounding businesses? Talk to multiple local investors who are unbiased (someone not trying to sell you something), get multiple agents and contractors feedback, and property management companies - two knowledgeble PMs really opened my eyes to my Class C homes. If it's cheap, there's a reason it's cheap.
Here's my comment on a post "what no one tells you about real estate" Good luck.
https://www.biggerpockets.com/forums/48/topics/1165499-whats...
