The reality is a seller's market is one of the hardest times to acquire investment properties. On the other hand, if you can have success in this kind of market than you will absolutely crush every other type of market!
The first thing you need to figure out is what makes a good deal for you. Not what makes a good deal for your investor buddy or your uncle who is in real estate, but for you.
Are you looking to build cash flow? To park your money in a hard asset as opposed to the stock market? What's your reason?
You need to be clear on what a deal needs to accomplish for you. This gives you a hard target that prevents you from accepting a deal that doesn't meet your needs. Trust me, when prices are aggressively rising in a seller's market it is easy to get caught up in the hype and start chasing.
In the end there are deals in nearly every market, some harder to find than others, but if you let your end goal change at the whim of the market you will find yourself in deals that don't meet your needs, which personally makes for a bad investment.
This doesn't just mean look elsewhere geographically. Also look at different property types within your local market.
Is your focus single family homes, but nothing seems to cash flow in your area? How about looking at multi-family units, do they look any better? How about rent by the room or short-term rentals?
If after working through the different niches you still find nothing meets your goals, then yes, start looking outside of your area. It can be as simple as starting with a 2 hour radius of where you live.
It all depends on your goals and comfort level. Going out of state and investing half way across the country is a viable strategy that many implement successfully.
I will say, if you do go out of state be sure to vet out good property management because they will be an asset for you. You can read more about that in the post: Tips for Buying Out of State Rentals
Figure our what goal needs to be met for you. Find deals that meet that goal, whether locally, out of town or in different property types and then stick to your plan.
If market participants want to overpay for properties don't get caught up in the hype. In fact, if you happen to own properties in that market take advantage of it by selling or tapping equity, thus enabling you to get into more deals in other areas or niches.
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