How to Build an Out-of-State Investing Team in Any Market (Rookie Reply)

Summary of How to Build an Out-of-State Investing Team in Any Market (Rookie Reply)

by BiggerPockets

26m•January 23, 2026
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Overview of How to Build an Out-of-State Investing Team in Any Market (Real Estate Rookie)

This episode of the Real Estate Rookie podcast (hosts Ashley Kerr and Tony J. Robinson) answers three common rookie questions: what minimum cash flow is acceptable, should you buy an investment property before buying your primary home, and how to build a reliable out-of-state investing team. The hosts use personal examples and practical sequences (lender → agent → contractor → property manager) and give concrete vetting tips, red flags, and action items for new buy-and-hold investors.

Key takeaways

  • Cash flow is contextual — there is no single “right” monthly minimum. Evaluate true net cash flow (after vacancy, maintenance, CapEx, property management, etc.), capital invested, time commitment, reserves, and expected appreciation.
  • $150/month can be a great deal if you put zero cash into the property and it’s true net cash flow; it can be a problem if you’ll be negative once real expenses are included or if you lack reserves.
  • If you want to buy before your primary, consider house-hacking (buy a duplex, live in one unit, rent the other) so you get owner-occupant financing and start building equity earlier.
  • For out-of-state deals, build your team deliberately: secure financing and a “buy box,” then connect with a local agent, contractor, and property manager. Vet each with questions that force them to reveal experience and numbers (not yes/no answers).
  • Red flags: agents with almost no investor transactions, lenders who hide fees/points until disclosure, contractors without rehab/investor experience, PMs with little investor client base or poor references.

Notable quotes:

  • “The best time to buy real estate is yesterday, and the second best time is today.”
  • “If you’re actively losing money every month on a property… usually we don’t want to be negative on a deal.”

Minimum cash flow — how to evaluate whether $150/month is “good”

  • Always calculate true net cash flow:
    • Start with gross rent.
    • Subtract mortgage, taxes, insurance, property management, HOA (if any).
    • Reserve for vacancy, routine maintenance, and CapEx (e.g., 5–10% for maintenance + separate CapEx savings).
    • Include an allowance for unexpected repairs.
  • Questions to ask yourself:
    • How much cash did I put into this deal? (zero cash-in = much higher relative return)
    • How much time will this take? (self-managing vs. PM)
    • What’s the appreciation outlook in this market?
    • Do I have reserves to cover early big repairs (roof/HVAC) if they occur soon after purchase?
  • Rules of thumb:
    • Avoid deals that are net-negative (unless you have a clear, strategic reason).
    • Small positive cash flow is acceptable if (a) low/no upfront capital, (b) strong appreciation, and (c) adequate reserves.
    • Don’t let analysis paralysis stop your first deal — the learning and momentum matter.

Buy primary or buy rental first?

  • It doesn’t have to be either/or:
    • House hack (buy a duplex or multi-family, live in one unit): combines owner-occupant financing benefits with rental income.
    • Consider FHA/owner-occupied financing if qualifying helps you get started sooner.
  • Practical considerations:
    • Check DTI and plan for ability to qualify for future mortgages.
    • If you have the capital and plan, buy both over time — many investors buy a new primary each year, rent the old one, and scale.
    • Work with a good lender to understand timelines and qualification rules.
  • Bottom line: If you have the resources and a viable deal, start now. If you can house-hack, that often gives the best of both worlds.

Building an out-of-state investing team — recommended order and roles

Example sequence used by hosts:

  1. Lender — get pre-approval and a “buy box” (property price range, loan products, investor requirements).
  2. Local real estate agent — find deals that fit the buy box and provide market insight on investor-friendly neighborhoods.
  3. General contractor — vet scope and cost for any rehab; prefer contractors experienced in investor rehabs.
  4. Property manager — involve them before rehab finishes so they can ensure the property is “rent-ready” and handle tenant placement.

Alternative approach: if you’re a property manager yourself or plan to self-manage, you may skip external PM initially—but still meet local PMs to understand the market.

Vetting questions & red flags (by role)

Agent

  • Ask: “What percentage of your transactions last year were with investors?” (avoid agents with 0–1% investor transactions).
  • Red flags: agent can’t advise on what neighborhoods cash flow or is overly emotional about “nice” neighborhoods rather than numbers.

Lender

  • Ask: breakdown of fees, underwriting fees, points options, break-even with paying points, product alternatives.
  • Red flags: lender locks you into a rate/fees without explaining points or includes undisclosed fees on the loan estimate.

Contractor / GC

  • Ask: experience with investor-focused rehabs, average turnaround, references from investors, sample scope & cost estimates.
  • Red flags: only does luxury or single-owner renovations (may be overpriced), no rehab references, unwillingness to provide references.

Property Manager

  • Ask: number of investor clients, vacancy turnaround, marketing channels, maintenance process, fees, how they handle rehabs.
  • Red flags: few/no investor clients, vague answers on processes, poor local reputation.

General vetting tips

  • Request specific metrics (number of investor clients, average time to rent, local cap rates).
  • Get references and cross-check with other local professionals (agents, lenders, PMs).
  • Use local community feedback rather than relying only on the person’s self-presentation.

Practical checklist / action items for rookies

  1. Define your target market and investment strategy (cash flow vs. appreciation).
  2. Use a reliable rental calculator to run true net cash flow (include vacancy, maintenance, CapEx).
  3. Secure a local lender or loan pre-approval to get your buy box.
  4. Interview local agents — ask % of investor deals and which neighborhoods work for investors.
  5. Compile a shortlist of contractors who specialize in investor rehabs; get written estimates and references.
  6. Interview property managers; involve them before rehab completion if you’ll hire one.
  7. Read loan estimates carefully; ask about points, underwriting fees, and options.
  8. Build reserve funds before purchase (enough to handle early big repairs and several months of unexpected expenses).
  9. Consider house-hacking if you need owner-occupant financing advantages.
  10. Use BiggerPockets resources (calculators, Teams directory), and landlord tools like RentReady to streamline operations.

Recommended resources mentioned

  • BiggerPockets calculators — for accurate net cash flow projections and stress-testing deals.
  • BiggerPockets Teams directory — find market-specific agents, PMs, lenders (biggerpockets.com/teams).
  • RentReady — rental operations (screening, rent collection, maintenance). Promo code: BP2025.
  • Steadily — landlord insurance tailored for investors.
  • Lightstone Direct — institutional real estate investment access (sponsor mention).

Final recommendations (short)

  • Don’t let a fixed dollar figure (e.g., $150/month) be the only gate — run full math, understand capital and reserves, and evaluate market appreciation.
  • If you can house-hack, it’s often the easiest way to start building portfolio and credit-ready rent rolls.
  • For out-of-state investing, plan the sequence (get lender buy box → local agent → contractor → PM), vet thoroughly, and cross-check references in-market.

If you follow the checklist — run the true numbers, secure financing, and thoroughly vet local pros — you’ll reduce risk and be set up to scale out-of-state with greater confidence.