The reason I only invest outside of CA

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Posted by Rich-CA on March 28, 2008 at 22:27:46:

In Reply to: Re: Self managing-out-of-state property?-WHY? posted by Jack E on March 28, 2008 at 15:32:23:

is due to several reasons. I should note that we started with rentals withing driving distance. Here is what caused us to make a change:

1. Unless you have a huge down payment or bought (or inherited) a long time ago, negative cash flow is the norm - even after the price drops,
2. Too much of our capital was invested into each unit. On one sale we went 5:1 and from townhouse to SFH by going out of state,
3. Evictions and other problems take a long time to accomplish here. 2 - 3 times as long and much more expensive than in any of the states where we now own property,
4. Diversification. The problems in CA or Phoenix do not affect our properties in CO and TX as those markets are in a different place,

If prices dropped to where I could cash flow on 20% down in SFH here in CA, I still would not do it because the taxes are too high and the courts are too anti landlord. One problem and all the "savings" of handling stuff myself is gone.

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