Advice re: out of state buying

I’d like anyone’s input regarding buying investment properties out-of-state, and the best approach to do it. I realize it ultimately depends on specifics, but any “you may want to do this” to help me would be good.

A month or so back, I decided to start looking at properties out-of-state in an area I grew up. I also have many relatives still living there, so I thought I’d check around. Turns out, I found several good deals. One is a 6-unit apartment that will cash flow nicely (yes, even using propertymanager’s 45-50% rule).

What I’d like to do is create an entity in the state I currently reside, which will own this and other properties I may find in the area (and if it gets too large, create another entity, and so on). I’d probably get financing with a personal guarantee, but the entity would hold title. Anyone have any advice as to how to approach this, what to look out for, and if this is the correct approach?

I would not set up the entities in the state where you reside. Many states will require you to register your out of state entity as a Foreign entity, which will just cost you more money. What happens if you don’t register your foreign entity, for one thing you don’t have access to the courts. Not good for a rental property business.

All the usual caveats apply about investing out of state.

Good Luck,


I have just begun my life as a real estate investor, and my first deal is out-of-state. The first bit of advice that I can give you is to have a really good realtor. Ours has been invaluable to us, not just because we are new, but because we are investing from such a great distance. Having a good lawyer is also a must.