Elk Grove, CA · Member since 2016 · 70 posts · 19 votes
Hi Everyone,
What are some good resources on here that give you tips on doing real estate remotely outside of my state? I do plan to focus on my own backyard, but with inventory low and competition high, I figure that I try my hand in other markets. Thanks.
I am in a similar situation and here is my plan of attack:
Step 1) Identify markets where I like the numbers and where the properties in my budget fit my long term goals.
Step 2) Identify the key turnkey providers and property management players in the desired location.
Step 3) Phone or Email Interview every TK and PM company I find with a website (sorry, but you cannot work with me in 2016 if I can't google your name and go straight to your website).
* In this interview I am looking to accomplish 2 things.
One, learn about the operations of the company and see if they meet my standards and I can see myself working with them. They are the most important member of your team and I would go as far to say that if no one in the city meets your expectations, FIND A DIFFERENT CITY! Rent income and projected ROI does not matter one bit if your PM can't collect.
Secondly, I am looking to learn about the market from the actual pros in the area. Ask them questions that test their local knowledge and improve yours at the same time. Tell them to break down the neighborhoods by street. Are there areas to avoid? What streets do you personally own rentals on?
Hope this helps @Sheldon Alex ! Please PM me if you decide to continue with this route. Maybe we can trade info on different areas and save some time! Good luck on your search!
Thanks for that recommendation @John Van Uytven. I'll make sure to follow that advice. If there's no one I know personally in an area that I want to invest in, should I use sites like LinkedIn and BP to find people and qualify them to see if they're a fit?
No problem @Sheldon Alex. Sometimes knowing someone already in an area, doesn't help unless they have a passion for real estate, and have a mind sight like you do. When I was living in Korea, I had family help me with my deals. They didn't do anything wrong, it just wasn't their passion or priority.
BP is great for that. LinkedIn could help as well.
The wonderful thing is it is not that hard to invest out of state. The terrible thing is that it is extremely difficult to invest out of state, successfully.
Are you looking for turn key or do you want to partner with someone local?
Do you want to invest in mid-sized cities and towns or are you looking at the suburbs?
What price points are you wanting to buy at?
What are you trying to buy?
I don't know about your area, but I was talking to a Toyota employee. Who lives in California, and he told my class that his small house is worth $800,000. Where as in our area $800,000 can buy a 15 unit or several nice SFR's.
For the vast majority of real estate investors, inventory is always low and competition is always high in their own backyard. I hear this over and over again from people that want to invest outside of their area. The grass is always greener on the other side.
I say this with tongue in cheek because I too live in California and invest heavily out of state. And @John Van Uytven is correct. You must have a solid team wherever you invest outside of your area. Unlike just about everyone else, I believe your success in out of state investing will not come from reading and learning about where the jobs are but again finding the right people. I have learned the hard way how true this is. Look for good people and not good markets and I believe you will find success in investing outside of your backyard. And looking for good people cannot be found in simply going to a resource somewhere. Resources like BP is a great place to start but you have to talk to lots of people. And to really do it right, you should even fly out to meet that person or team.
welcome here and there is always deals everywhere and anywhere, with different strategies... some market harder to find than others. I also invest in California and decided to go with small condos in Long Beach because they can cash-flow.
I started here is USA in 2008, directly investing in 14 deals Out-Of-States, after I took my Real Estate Class for Investors... and have teams in IL, IN and GA if you need any help... Deals out of States have more potential usually, can double your money, but also needs different "Nerves".
I am in a similar situation and here is my plan of attack:
Step 1) Identify markets where I like the numbers and where the properties in my budget fit my long term goals.
Step 2) Identify the key turnkey providers and property management players in the desired location.
Step 3) Phone or Email Interview every TK and PM company I find with a website (sorry, but you cannot work with me in 2016 if I can't google your name and go straight to your website).
* In this interview I am looking to accomplish 2 things.
One, learn about the operations of the company and see if they meet my standards and I can see myself working with them. They are the most important member of your team and I would go as far to say that if no one in the city meets your expectations, FIND A DIFFERENT CITY! Rent income and projected ROI does not matter one bit if your PM can't collect.
Secondly, I am looking to learn about the market from the actual pros in the area. Ask them questions that test their local knowledge and improve yours at the same time. Tell them to break down the neighborhoods by street. Are there areas to avoid? What streets do you personally own rentals on?
Hope this helps @Sheldon Alex ! Please PM me if you decide to continue with this route. Maybe we can trade info on different areas and save some time! Good luck on your search!
Yeah that is true @John Van Uytven. I know of one person that has done wholesaling before and lives in Texas, so could try and work something out with her.
I'm looking to mainly partner with others in other areas, would have to look into if turn key would be a fit for me. Would like to invest in cities of different sizes. As far as price range, would depend on the location. Will map out everything once I finished my business plan next week.
Thanks @Kevin Yoo for your advice. I'll make sure to focus on finding the good people who I can find trust in working with
I would buy one first and learn the process as opposed to going balls to the wall and getting 4-6 at one time. No matter how much you educate yourself you will over pay 4-6k just by not knowing the best practices of remote duedilligence.
A lot of the advice mentions turn-key providers, but you have mentioned that you wanted a partner. So, I would ask you this:
- If the turnkey over rehabs a property, they get profit, and you pay more, does that sound like a partner?
- TK providers often hire out property managing which means they inherently our into the investment for the short term, shouldn't a partner have the same financial goals as you?
I'm in Phoenix, AZ and work with investors, where I find, locate, and manage properties. I'm in it from acquisition, through renting, up until the point we sell. I would say look for a partner, not a TK provider
Thanks Michael. Honestly I had yet to know what a turn key provider was until I checked earlier today, and it didn't seem ideal for what I wanted to do. Partners sound better.
Wow that is far away! But sounds like you made it work! Thanks for this info @Daniel Ryu. I will definitely go through this and hopefully follow suit soon!
Hey all. I have been doing out of state for several years and never bought a listed property yet. I just closed on one in March and was on the phone with the PM. Setting it up to be rented. The last thing I asked her was did they know of any properties for sale. She did and I placed an offer today. The hardest part is getting to know people 3000 miles away well enough to buy a property through them. When I looked at a new city it took over 1 year to figure out who to use. Remember it's a lawyer, several realtors, a good PM, and in this case I found a CPA. Then find an off market property. It takes TIME!! The other thing I can tell you is the most important part is the PM. They can make or break your buissness. I would almost say it's better to take a market that is not as good of a performer if it has a better PM. What good is a higher return if it's not managed correctly?? RR
One of the things that I learned is to be able to rely on technology. You have eliminate any concerns or fears that may develop with never setting eyes let alone set foot on the property. I've done this by being strict on my underwriting, only working in areas where I can assemble a boots on ground team to augment my weaknesses from being abroad.
Yeah I keep reading about how important it is to have a good property management team if you're doing buy and hold, especially out of state. I'll keep in mind though on the amount of time it can take to find the right people in other states. I'll prepare for the long marathon.