Real Estate Rookie Podcast Summary

Episode Title: Local vs. Out-of-State Investing: Where to Buy Your First Rental (Rookie Reply)
Hosts: Ashley Kehr & Tony J. Robinson
Release Date: November 28, 2025
Podcast: BiggerPockets Real Estate Rookie

Episode Overview

In this “Rookie Reply” episode, Ashley and Tony dig into three common questions from new real estate investors:

1. Should you buy your first property locally or out of state?
2. How does financing work for a BRRRR (Buy, Rehab, Rent, Refinance, Repeat) investment—especially navigating the loan options?
3. What should you consider when selecting and managing an out-of-state property manager?

The tone is supportive and practical, addressing the real risks, mindsets, and strategies for beginners in the rental property arena.

Key Discussion Points & Insights

1. Local vs. Out-of-State Investing

([00:00]-[09:04])

Pros of Local Investing

• Better market knowledge & personal network.
• Access to trusted vendors & agents.
• Easier property management and oversight.

“I think it is an advantage to invest in your backyard because you have a better knowledge of the streets. You are physically there to see what's happening in the market…”
— Ashley Kehr (01:15)

When Out-of-State Makes Sense

• Local market is too expensive or won’t yield positive cash flow.
• Better returns available elsewhere.
• Willingness to build a new network out-of-state.

Deciding Factors

• Your Why: Define your primary motivation (cash flow, appreciation, tax benefits, etc.)
• Resources: What can you actually afford? What financing can you qualify for?
• Risk Tolerance: More management challenges and trust required for remote investing.

“It comes down to your motivations. Why are you doing this? And it comes down to your resources.”
— Tony J. Robinson (06:45)

Avoiding Analysis Paralysis

• Don’t let the pursuit of a “perfect” first deal stall your progress.
• Early deals may have subpar returns but will build momentum and experience.

“Your first deal doesn’t have to be a home run… I gave away equity, paid interest, gave up so much just to get that first deal done. But it propelled me into my investing journey.”
— Ashley Kehr (07:51)

Using a HELOC (Home Equity Line of Credit)

• Great for cash purchases or bridging capital.
• Watch for high leverage when using HELOC as a down payment.
• Have a clear repayment plan.

2. Financing & Loans for BRRRR Investments

([10:58]-[19:01])

Loan Structures in BRRRR

• Can be two or three stages:
  • Loan for purchase
  • Loan for rehab
  • Refinance, or combined “fix and flip”/rehab loan
• Many investors use cash, private money, or lines of credit upfront, then refinance.

“I typically find a way to purchase the property where I'm not getting funding on the deal through like a bank loan. I'm finding a private money lender, using a line of credit, or using cash that I've saved up…”
— Ashley Kehr (11:54)

• Others may use hard money or traditional renovation loans.

Cost & Risk Analysis

• Consider all fees: closing costs, loan origination fees, rehab funding charges.
• Understand the risk if the property doesn't appraise for the expected "after repair value" (ARV).
• Using high-interest debt (credit cards, hard money) increases risk if timelines or appraisals don’t pan out.

“Weighing out the cost of using the different types of funding and also the risk of the different types of funding that you’re doing too.”
— Ashley Kehr (16:37)

"Seasoning" Requirement for Refinancing

• Most lenders require the owner to hold the property for 6 months before cash-out refinancing to realize the full future value.
• Early refinancing will often be capped at your actual costs, not ARV.

“Oftentimes when you go to refinance, lenders want a, a seasoning period. Basically, they want to see you have owned that property for at least some period of time before they'll allow you to refinance and take capital back out of that deal. Usually... six months.”
— Tony J. Robinson (17:07)

3. Evaluating & Managing Out-of-State Property Managers

([21:53]-[29:37])

How to Find and Assess Property Managers

• Ask for referrals from local agents.
• Search online for reviews and reputation.
• Interview multiple options—evaluate responsiveness and willingness to answer detailed questions.

“Out of the five that I called or tried to contact, I think I only heard back from two or three of them… I met them for coffee… What are their teams like? Is this a one-man show?”
— Tony J. Robinson (22:26)

Essential Questions/Red Flags:

• Understand full fee structure: management, leasing, maintenance, inspections.
• Review contracts and look for “nickel and dime” practices.
• Understand team size, experience, and turnover protocols.

“A lot of rookies mistakenly assume that the only way that PMs make money is from their management fee every single month... they also make money from doing things like leasing your unit, or anytime there's a turnover, and if they're taking care of your maintenance for you.”
— Tony J. Robinson (23:33)

Ashley’s Lessons from Managing and Hiring PMs

• Don’t be fooled by slick marketing.
• Ask specific, quantifiable questions (not just yes/no).
• Watch out for hidden or add-on fees (e.g., for routine inspections, markups on materials).
• Always double-check owner statements and investigate unusual charges.
• Even with a third-party manager, owners must “manage the manager.” Review details and stay proactive.

“There are just things that they don’t do that you want to do for your property too… you really do need to go through detail by detail your owner statement and see what you’re being billed for.”
— Ashley Kehr (29:37)

Resource Shared:

• “78 Questions to Ask a Property Manager” – Article on BiggerPockets (linked in show notes).

Memorable Quotes

• Ashley Kehr:

  • “Your first deal doesn’t have to be a home run.” (07:19)
  • “Don’t try to overanalyze and find that perfect deal…” (07:31)
  • “I picked the company because of its marketing… Wrong mindset.” (24:41)

• Tony J. Robinson:

  • “It comes down to your motivations. Why are you doing this? And it comes down to your resources.” (06:45)
  • “Part of it is managing the PM, asking all of those questions, holding them accountable, and then not being afraid to make the change…” (29:02)

Timestamps for Key Segments

• Local vs. Out-of-State Investing: [00:00] – [09:04]
• HELOCs and Funding Options: [01:15] – [05:05]
• Defining Your 'Why': [05:05] – [07:19]
• Analysis Paralysis and First Deal Mindset: [07:19] – [09:04]
• BRRR Loan Structure Q&A: [10:58] – [17:07]
• Seasoning & Refinancing in BRRRR: [17:07] – [19:01]
• Evaluating Property Managers (questions, red flags, contract details): [21:53] – [29:37]
• Managing the Manager & Owner Oversight: [29:02] – [29:37]

Conclusion

Ashley and Tony provided practical, reassuring advice for rookies weighing whether to invest at home or out-of-state, untangled the complexity of BRRRR financing, and shared hard-won lessons about picking and working with property managers. The central message: clarity on your goals and thorough due diligence matter more than “perfect” deals or markets, and firsthand experience will build your investing skills fastest.

For full resource lists, article links, and detailed question checklists, see the episode’s show notes at BiggerPockets.com/rookie.