Originally posted by @David Faulkner:
The mistakes you should avoid is buying property in another state. You are surrounded by great opportunities with fantastic ROI in your own backyard ... why on earth would you go out of state to a market you know nothing about, because some turnkey marketer told you it would be a great investment, thousands of miles away where you'd need to hop on a plane to even see the place, where you are 100% dependent on providers you don't know who may or may not have your best interests at heart to make the investment work, paying retail (or more) for the property, and expecting great financially responsible tenants that would willingly choose to rent your place instead of purchasing their own place for less money?!? Doesn't sound like a winning strategy to me. I've owned both out of state and in state for 15 years; I don't do out of state any more but kept everything in state, so I speak from personal experience and have nothing to sell you either way. Good luck to you whichever path you choose.
David, I don't think buying out of state immediately devolves to some hard sold turnkey operator.
At least here in the SF Bay Area, it is quite hard to enter the market at all,much less be able to minimize risk with cash flow.
So, you are almost immediately pushing towards out of area (I'm looking in the Central Valley, but I'm driving 2.5 hours each way just to check out the market).
But, you still want some appreciation.
Not a ton of choices in driving distance.
What are the variables :
1. Ability to physically check out the market (easier for my buddies in the airline industry or other frequent travelers).
2. Ability to build a good local team (a lot easier than it used to be. Heck, how often do you meet face-to - face with your local crew?)
3. Ability to manage (also a lot easier than it used to be).
4. Ability to maintain (something a lot of real estate investors don't do themselves period)
5. Ability to monitor performance (also easier than it used to be, but definitely a risk).
6. Ability to intervene in case of problems (the most costly challenge if things go wrong ).
We all trade off these factors with risk and gain in all of our investments.
I think it is worth going through each of these factors to find best practices (and gotchas) for buying and managing property.
