First Acquisition

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May 02, 2022

by a searcher from University of Tennessee - Knoxville in El Dorado Hills, CA, USA

Do you think it is prudent to make your first acquisition out of state? I currently live and work in California and would love to stay here but the current atmosphere is very unfriendly to business. I have been looking at the Southeastern USA but am unsure if that is a worthwhile attempt unless I move.

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Reply by a searcher
from Harvard University in Fort Wayne, IN, USA
We’ve avoided even hiring folks from CA (we have remote employees) because of all the legal & HR issues with hiring CA employees. Recommend finding something just over the border in NV or looking elsewhere.

We are HQ’d in GA and it’s not bad. FL, TX, and IN tend to be very good. Don’t want to be political, but if you want business friendly, look to traditionally red states and avoid the blue (CA, NY, NJ, MN, IL). I looked at a business in IL but only because I could move it across to IN relatively easily.

All that said, location is just one small piece of the puzzle. And CA is truly a beautiful state!
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Reply by an investor
from West Virginia University in Boston, MA, USA
If you buy a business out of state and wish to remain in CA, perhaps something to consider is to use cashflow from the business to buy a property that you can live in when you are in town visiting the business. Then list the property on AirBNB, VRBO, etc. when you are not in town. Let the cashflow from the short-term rental cover the cost of flying in plus your property's note. There's other options to generate income if you don't want to use a short-term rental. For example, if you can set up part of the property as a studio, it could be rented out to people wanting to do podcasts, create video ads, etc.
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