Should you invest in a property in-state or out-of-state?

Updated: Jul 4, 2020

There are some benefits to investing out of state but Peoples Capital Group prefers to invest in state for a number of reasons. This episode will explain the pros and cons of each option through experiences that Aaron and Seth have had over the last 10 years of real estate investing. The Passive Cash Flow Podcast is for beginner or experienced investors. Learn how you can diversify out of the stock market, own a part of an apartment building & start earning Passive Cash Flow! Peoples Capital Group has been helping passive investors build wealth in NJ real estate for 10 years. Visit to find out if you qualify to start earning passive income and pay less taxes via investing in real estate. IRA's and 401K's are accepted. -- #NJRealEstateInvesting #AaronFragnito #PassiveCashFlow #PCG


Aaron Fregnito: All right ladies and gentlemen welcome back to the Passive Cashflow show, episode number 16 today. I'm your host Aaron Fregnito, owner of People's Capital Group, out of Berkeley Heights, New Jersey. We focus on buying apartment buildings here in New Jersey. We focus on our market in North Jersey, and today we're going to talk about investing instate versus out of state. I'm going to talk about the benefits of why we invest locally here. Why we don't go out of state, where a lot of syndicators preach going out of state and working with other management companies and other investors preach going out of state to get better deals. We're going to talk about the benefits of staying in-state, staying close to your home. Why I don't go out of state. Why I don't go chasing other markets and, listen, there's no one right or wrong answer, it's just our investment strategy, and that's we're going to talk about today. By the way, if you want to learn how you can get invested passively in some New Jersey apartment buildings, you can live anywhere in the country, but you can invest in this New Jersey Market and play off that New York City Market here in New Jersey by going to and putting your information in and if you qualify, you can invest passively in New Jersey apartment building with us, here at People's Capital Group. That's a great way to earn passive income and tax benefits, which all my other videos talk about. We're going to break into it today, why do we invest instate? This is about investing instate versus out of state. A lot of gurus out there tell you that you should be investing in the Carolinas or in Miami or Buffalo or Austin Texas, and these are great markets, and Dallas Fort Worth, these are great markets that have seen booms, and busts, and right now they're booming, and right now these are great markets to invest in. Atlanta, these are areas where the wage growth is strong our people are earning more in comparison to how much housing costs in the average market. Cincinnati, Ohio, that's a good example of these emerging markets. Columbus, Ohio, where the amount people are earning is not as much as the housing costs, like in San Francisco, where the housing is so expensive. In Manhattan, housing is so expensive. People are earning the max of what they need to earn to afford that. In these areas, these submarkets, these are areas where statistically it shows that the market's growing very quickly, and also the amount people earn hasn't caught up yet to housing costs, ideally or really vice versa. Housing costs haven't caught up to where people earn. In these markets, the argument from gurus is, well listen housing has room to grow. The cost of housing hasn't caught up to a third of the person's income in this area, so the cost of housing will grow and catch up to being around a third of the income of those individuals. Once the cost of housing is around a third of the individual income or the median income of that area, then the idea is, "Okay, housing costs have grown to where they max out at." Which is around a third or so of income in that area. These gurus use these statistics to say, "Well, these areas have room to grow in housing costs and rent costs." Because rent is low in comparison to what people earn in this area. Now, I get that and there's lots of other statistics you can use to analyze markets, and there are lots of gurus out there that you can pay lots of money to listen to them, and go to their boot camps, and they can tell you all about all the benefits of getting into these emerging markets. Dozens of statistics on why these markets are set to boom, and they're probably right. A lot of these markets are set to do quite well, and I know a lot of people that go into these emerging markets and they do well with them. I've seen other guys I know go into Kentucky and Louisiana, and they've done well with those markets and more power to them. However, I must give you words of wisdom here and some warning that if you're starting as an investor, as I see a lot of people do and they go out to these guru courses or whatever, and these gurus tell them, "Hey, go buy something in the Carolinas because the cost of housing there, and the rent, and it makes more sense financially in ROI and bada bing bada boom." They're right. You could probably get more real estate in some cities and get higher rent and because of that the numbers look better on paper and that's great, but the truth is if you're getting started in real estate, you should not be investing more than an hour from where you live. That's it, you need to be near your markets. You need to be near your real estate. I hired a management company one time, and they met tenants of the property. They would meet a tenant at the property in the morning, they collect the first month's rent. Security deposit and they'd lease out the unit to that tenant. They'd sign a lease and give them the keys, and they'd send them on their way and so you can come back or in a couple of days or whatever, you could move in a few days, we'll give you the keys then. Then they would meet a tenant at the same unit, lease out the same unit to another person, two hours later collect the rent, security deposit and do the same thing to someone else two hours later. They do to three or four people in a day. Collect the rent, security deposit for the same unit, and ran off with the money. That was the second mana