Finding tenants out of town (without a property manager)

[Matthew Wagner]

Hey guys --- I'm closing on my first REI property in Charlotte, NC on 09/01. I am from that city, but I currently live in NYC -- which is clearly prohibitive for a first time investor to try and wiggle into the world of real estate investing.

Anywho, this property I'm purchasing is a 2 bedroom, 1.5 bath townhouse located in a pretty convenient part of town. I got it for 102k, putting 20% down, after everything is added in, looking at around 830 overhead (P&I, taxes, insurance, and the damn HOA fees).

I feel confident I could get at least $1100/month for this place, but my current dilemma is that I don't know how to really advertise and get tenants in place.  My friend recommended ***********, which seems okay in the long run, but I close on Friday 09/01 and I'm back to the city on Tuesday.  I guess I could list it on *********** and try and get showings that weekend?  What are your guys' strategies for those that don't use property management?  Or should I just eat it and get a property manager and cut into the cash flow?

I have plenty of liquid assets to get me through, so I'm sure I'll make some costly mistakes along the way, but I want to try to mitigate as best as I can.  Thanks for the help guys, and pleasure to be here!

Matt

[Chris Claflin]

Hi Matt,

Similar to what Raul said, the most important asset you have as an investor is your team. I would even put team before market and property.

As for finding tenants from a distance, I would be pretty concerned. That's something I would never do for my own rental properties unless I had a trustworthy property manager. I wouldn't even do that if I knew the tenant beforehand. I think the couple of scenarios below (REAL stories from people I know who have done exactly what you are describing) may help with this point:

- Tenant doesn't know the first thing about home maintenance; you get a call because the fridge goes out at 10PM on a Saturday. What do you do? You ask the tenant how everything else is going and they tell you good except for the bucket on the kitchen floor that has been accumulating water from the leaking roof for the last 2 months.

- Tenant looks great on paper. Pre-pays rent months in advance. All seems great. Nine months down the road you make it out to the property to find they have been destroying it. Then you get contacted by the Feds to find out he is the largest coke dealer in the state, but none of that showed up on the background check you ran.

Also, you want to think about the practicalities of managing yourself like do you want to research what you can legally charge for late fees, all the ways you can get in trouble with fair housing, how to properly setup, document and perform accounting on a trust account for deposits in NC (yes the security deposit act applies to DIY landlords in NC). Think about what happens when the tenant has an emergency repair but you don't have phone service because you are on a plane or in a remote location. Who is going to check the work your vendors do? Who is going to meet the vendor at the property if the tenant can't be there? How do you know who is really living there?

Lastly, a good Charlotte Property Management company should be able to help you become a more savvy investor and help your investing grow in this area by connecting you to other great folks and providing you with great information.

Let me know if I can answer any questions you may have, Matt about investing in Charlotte, tenants, buy and hold, or Charlotte area property management!