Assembling a team - Out of State

[Jaime Morales]

I am currently in San Francisco but planning to invest out of state (MFR buy/hold). My question is about which members of my team should be in-state vs out-of-state. Obviously, Property Management and Maintenance should be located where the property is, but what about some of the other team members? Attorney, lender, CPA, etc... What are the pros and cons of having some of these team members local to the property vs local to the investor?

Any help is greatly appreciated.

Thanks!

[Jeremiah B.]

Hey Jaime,

I'm an out of state investor who lives in Portland and buys in Charlotte.  We own 6 out of state properties, all purchased in the last 24 hours.

First - I want to highlight that your team will be your single most valuable asset!  Even moreso than time or capital!

To answer your question:  Obviously you need boots on the ground for most things like RE agents, PM, Rehab, etc.  Although less intuitive, I would add your attorney to this list as well.  It's unlikely that you will need the attorney real often, but when you do, you want someone who can actually practice law in that state :).

Having your lender in the market will also make your life easier. Though in my experience, this is far more of a convenience than a necessity, and working with a lender outside of the market is just fine.  My lender in Charlotte (where I buy) works great with the rest of my team, and that translates into a very efficient process.  However, she is limited in what loans she can make, and I've done several loans through a bank in KC.  This has been fine, but is simply less convenient.  And if you already have a relationship with a lender who can meet your needs, using them is probably the path of least resistance.

I've actually found that having a local closing agent is a big help.  This surprised me a bit, as I had historically thought of this role as commodity.  But having a single closing agent who is local to the area, knowledgeable, and can work with different lenders has saved me a lot of gray hairs.  In fact, whenever I've used another closing agent, I've been burned to varying degrees.

Your CPA or tax person who is already doing you personal taxes should be able to do the tax filings for these investments.  As such, these should probably be local to where you live - but be sure that they are familiar with rental properties and can file in the state where you're investing.

Happy hunting!