Best Deal Ever Show #22: How to Turn $100K on an Out-of-State Property

Annie is based in Oakland, California, also known as the Brooklyn of the Bay Area. She first began in the industry while living in D.C. with her husband, after her Realtor explained that a property she bought could one day become “cash flow positive.” After hearing those words, she moved forward and rented out her in-law suite and eventually began purchasing additional duplex family homes to rent out, as well.

Experts in syndications, she and her business partner Julie, run Goodegg Investments, which focuses on helping busy mothers get started in real estate without the hassle of being landlords.

For those who don’t know what real estate syndications are, Annie does a great job explaining in our interview. Simply put, syndication means that a group of investors come together to purchase a large real estate investment—and in this case for Goodegg Investments.

Annie’s companies take on large commercial buildings for their investors, while managing the landlord aspect of the property, allowing her tenants to take part of what’s called “passive investing.” This means they take home a monthly cash distribution payment and take a share of the profits once the property is sold.

Over the last two years, Goodegg has co-sponsored 5,800 multifamily doors across the southeast and has over $700 million in assets.

What’s so unique about Annie’s story is that her company focuses primarily on helping women get into the investment side of real estate. Annie says that oftentimes the investment aspect of real estate has a “hard edge.” She feels she’s been able to stand out by making sure her brand is simple to understand and has an inviting atmosphere that’s focused on building community.

Annie’s Best Deal Ever

After listening to the BiggerPockets Podcast and diving into research, Annie decided that she felt ready to start expanding her reach into a new area. Through her research, she settled on the emerging market of Huntsville, Alabama, primarily because it had the qualities that fit her investment goals.

Location, Location, Location

Once settling on a city, Annie took the initiative and reached out to brokers and property managers, but she found her gem of a property through LoopNet. What she found was a six-plex that was fully occupied for $170,000—across the street from a trendy, up-and-coming space with lots of new businesses and promising potential.

Not only was this a great location because of the activities across the street, but Huntsville also has a large amount of government-owned land surrounding the city, meaning that there is limited availability for housing. Because of the location, Annie felt confident that this was a place she wanted to be in and took a leap, purchasing the property with HELOC (home equity line of credit) from another investment property she owned. She got an incredible interest rate of 2 percent for the first year.

Ultimately, after two years and a few repairs, Annie sold the property and made about $100,000 in profit, offloading it for approximately $270,000.

Key Lessons Learned

Although this hasn’t been Annie’s biggest deal, she said it’s certainly her best deal. She was able to quickly resell the property and learned foundational principles from this experience that she’s applied to even larger deals.

Her mindset shifted after doing this deal, leaving her with the lessons that have brought her closer to where she’s wanting to go.

She advises: “Fail fast. Fail faster if you can.” And she encourages investors to not be afraid to try something new. Because without past failures, it’s impossible to move forward and find even bigger opportunities.

Annie’s Top 3 Tips for Other Investors

1. Research carefully

Look for smaller markets with job and population growth and something that meets your investment goals.

2. Ask what sets the city apart

Like we mentioned earlier, the land was likely to go up in value over time due to its location and government land limitations.

3. Realize that, in Annie’s words, “small hinges swing big doors”

Finding the right market is the hinge that will determine the extent of what’s possible. After you select the market, then you can build (sometimes literally) the rest of the dream from the ground up. Whether that’s taking on repairs, upgrading, building a team, or finding the perfect person to partner with.

Is there a market other than your home market that you have targeted for investment?

Let’s talk in the comment section below.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.