Hello Bigger Pockets

[Christopher Griffin]

Hello All,

My name is Christopher Griffin. I am from Los Angeles, California/Albuquerque, New Mexico. Myself and two of my industry peers are interested in expanding into real estate investment together. We are all extremely new to real estate investing, and came to Bigger Pockets to hopefully find some basic advice on starting out. We are looking to invest out of state because California is ridiculously expensive. Together we compiled some initial questions. If you guys have any words of advice that'd be great. Thanks you.

1. Can you get an in state loan for an out of state real estate purchase?

2. How do mortgage brokers calculate eligible loan values and credit scores when multiple investors are involved?

3. Should we form an LLC? If so we would prefer to form out of state because of California business fees.

4. Since we are looking to invest in real estate outside of our home state, what are some common hurdles and pitfalls that we should be aware of?

The two states we are currently looking to invest in are Washington and Texas:

5. Are there laws or regulations to be aware of when investing in either Texas or Washington?

6. People who invest in Texas from out of State, how was your experience with cash flow with having to pay your state’s income Tax combine with Texas’ high property tax?

Thanks again for your help.

Sincerely,

Christopher

[Isaac Ramos]

@Christopher Griffin,

Welcome to the site! I too started out with two buddies (all engineers) investing in Albuquerque real estate. That company is still going strong! Working with your friends as investors has, and continues to be, one of the most exciting experiences I’ve encountered! Let me take a stab at your questions, I’m only able to advise on some of them …

• 1)Yes, this is usually pretty straight forward. Biggest requirements for the loan are that you have the income to cover the debt. Keep in mind, cash is king in real estate and taking a loan for a property will often not allow you to offer on the properties with the highest value.
• 2)Credit scores are typically (in my experience) tied to interest rates as opposed to loan amounts, unless the scores are exceptionally low.
• 3)I did! The LLC afford all sorts of protection for real estate investors. Some investors even form a separate LLC for every project to develop project to project protection. A local NM attorney helped us form our LLC (PIJ Properties). His name is John Budagher III with Budagher and Associates, look him up if you decide to peruse an NM LLC! Mention my name (Isaac) and he'll probably be able to just copy our LLC docs over to you!
• 4)I am not too sure, I only invest in NM, but the market is great here. We usually average 20%+ ROI on rehab (flips) and 18% Cash-on-Cash for financed rentals. High 9/10 CAPs can be found all over.
• 5)No idea.
• 6)^^

Hit me up if you’re ever in NM and want me to shoot some deals your way, we’ve got several currently under contract with great value.

Best of luck investing with your buddies!

Isaac