First time out of state investor

[Amanda Skipper]

What is a good way to feel out of state real estate agents and others that I will need to build my business. I am not able to fly to meet up at the moment and probably won't be able to for 6 months or so. What are some good questions to ask?? Thanks in advance!

[Jimmy Lieu]

Quote from @Amanda Skipper:

What is a good way to feel out of state real estate agents and others that I will need to build my business. I am not able to fly to meet up at the moment and probably won't be able to for 6 months or so. What are some good questions to ask?? Thanks in advance!

Hi Amanda! When vetting OOS agents, you need to know if they are an investor. Then ask about their experience working with remote investors specifically - you want someone who's great with virtual showings and detailed walkthroughs. Check their communication style - do they respond promptly, comfortable with video calls, and send regular updates? Ask for references from other OOS investors they have worked with. And also test their market knowledge - which neighborhoods are seeing the best appreciation, do they have a network of PMs, lenders, and GCs, etc. Happy to connect and answer any questions you may have.

[Gladimir Lobo]

Where is Bob Prisco/Bob Stevens? Too soon?

[Julia Lyrberg]

Since you can’t meet in person right now, I’d suggest hopping on a call or Zoom to get a feel for their local market expertise. It’s important to find agents with strong local market knowledge, so I’d ask things like:

1. "What kind of investment properties are you seeing the most interest in right now?"
2. "Which neighborhoods are you finding the most potential for out-of-state investors?"
3. "How do you usually work with out-of-town buyers, and what should I know about investing remotely in your area?"

This way, you’ll get a sense of whether they know their market well and if they’re used to working with investors like you. Plus, you might get some valuable insights right off the bat!

[Tanarat Bunchom]

Hey Amanda! When working with out-of-state agents remotely, try asking about their experience with out-of-state clients, their take on market trends, how they handle issues if you’re not local, their communication style, and if they can share any recent deals or references—it’s a quick way to see if they’re a good fit without being there in person. Good luck building your team!

[Remington Lyman]

Quote from @Gladimir Lobo:

Where is Bob Prisco/Bob Stevens? Too soon?

I can tell you where he is not: on the forums. He is probably on his way to @james Wise's house.

[Gary Nelson]

My suggestion is to look for someone with a strong track record in investment properties, ideally someone who has successful investments themselves. Start by checking investor forums, networking groups, and local real estate investment associations for recommendations. Once you have a few candidates, ask about their experience with out-of-state clients, their knowledge of local rental markets, and any contractor or property management connections they might have. A great agent will not only understand investor needs but will also act as your "boots on the ground," providing detailed video tours, market insights, and local contacts to make sure you’re well-informed every step of the way.

[Dean Harris]

I would ask only 1 question....."Do you own rental property in the areas Im going to buy in"?

Your agent will be able to refer you to the best of the best becuase why would they use anyting less? Agents are in the market, they are looking for the same GC's and vendor partners you are. 

I own a large portfolio of SF rentals in Memphis, TN. I also only sell investment deals in Memphis, TN and the best invesotors ask me where I buy and how I by them and who helps me along the way!

Good Luck!
 

[Jordan Ray]

Quote from @Amanda Skipper:

What is a good way to feel out of state real estate agents and others that I will need to build my business. I am not able to fly to meet up at the moment and probably won't be able to for 6 months or so. What are some good questions to ask?? Thanks in advance!

Hey Amanda! The best thing to do to "feel out" real estate agents would be to simply just talk to them until you found someone you "feel" you can trust and then go from there! Hope this helps!

[Drew Sygit]

@Amanda Skipper most agents are clueless on how to work with investors!

They only know how to do owner-occupied transactions.

Several, but not all, agents here on BP though, SEEM to know what they are doing.

If they can't help you analyze ROI or cashflow, and just want you to offer asking prices, then what value do they bring?

A good agent will ask about your ROI & cashflow, then help you work backwards to determine an offer price to make your numbers work. Then, if the amount is less than the asking price, advise you on the chances your offer may be accepted. Of course, they should be willing to still submit your offer!

Here's some other copy & paste advice you might find useful:
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Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.

If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

If you buy/renovate a Class A property in Class D area, what quality of tenant will you get?

Similarly, if you put all Class D tenants in a Class A 4-plex, what do you think will happen?

So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases.:

Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.

Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 years

Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

The City of Detroit has 183 Neighborhoods we’ve analyzed.

PM us if you’d like to discuss this logical approach in greater detail!

[Gladimir Lobo]

Dean Harris gets my vote. The burning question is: do you own rental properties? Everything else is just mind games. Show me how to do what you’re doing.

[James Wise]

Quote from @Gladimir Lobo:

Where is Bob Prisco/Bob Stevens? Too soon?

bruhhhhhh

[James Wise]

Quote from @Amanda Skipper:

What is a good way to feel out of state real estate agents and others that I will need to build my business. I am not able to fly to meet up at the moment and probably won't be able to for 6 months or so. What are some good questions to ask?? Thanks in advance!

 That main thing would be to look at their area of focus. You ask 50 agents if they work with investors and most all will be like yea I always work with investors. But if you look into their marketing, socials, Youtube, IG, past sales record on Zillow and stuff you can see if they really are in the investment space or if they work with traditional homeowners. Agents that work with homeowners are totally different from investor agents.