Out-Of-State Investing - What Is Your Process?

Question

As a noob, would be curious to know what is everyone's process to get to receiving that monthly rental check?

Here is my process I have thought out for now, please feel free to critique/provide improvements based on experience:

• Learn through BiggerPockets, David Greene, Gary Keller -- I personally want to avoid getting too deep into this phase, get the basics and run with it
• Create a system on analyzing a property - I have my own parameters that work for me and have put them on an excel sheet - I have what I call 'quantitative' and 'qualitative' tabs that give me a 300 degree view
• Get pre-approved as I am learning
• Next comes the Research phase (learning and researching are going together) - this is taking time.  I am first narrowing down on a few States, then get to counties, then to cities and then to neighborhoods - leaning a lot toward the South
• Once I have narrowed down a few cities/neighborhoods, I will look for realtor agents in that area primarily through BiggerPockets
• Idea is to identify a killer agent with whom there is a connection.  May fly down to meet if all looks good
• Will leverage the killer agent's network to help setup the team of property managers and lenders on the ground
• Close the deal
• Have tenants
• Keep tenants happy and stress free by providing spectacular services
• Receive check!
• Pay bills on time, build equity, invest profits
• Repeat Steps 5 - 12 above

Neel Jain · Answer

@Luis Vaca, big names could eat into profits.  Having said that, it all depends.  Big name PMs know bulk of their commission goes to their big name company..I doubt they'd be as hungry as an independent.  But again, it all depends on the situation.

@Clayton Mobley, thank you.  I am at that stage of narrowing down my list of potential cities.  I have looked at a lot of data over the weekend, just don't know how to interpret it to prepare my list of cities (it has cities from all kinds of States).  All the economic numbers indicate the South leading the pack.

I have a list of different States and Counties with the latest % changes but just don't know how do they translate into REI - whether is it a renter's market?, whether it is the right time? etc.  And I think I hear you when you say, quote, "where you see numbers that meet your needs and then switch to focusing on people, let those choices pick the market for you.", unquote.

But yes, people make everything.

Ali Boone · Answer

Being a turnkey investor myself for out-of-state stuff, and therefore I don't have to do most of these steps (and don't want to), I have to say that your list looks pretty good! I actually really like it.

The only potential edit or question I have for it is on #10. Are you planning to landlord the property yourself if it's out-of-state? Or would you use a property manager? Major difference in those two options.

Ali Boone · Answer

Haha...good luck with that! They exist, but they aren't always easy to find.

Clayton Mobley · Answer

@Neel Jain I like the list! If you're going the DIY route for OOS investing (vs turnkey) then you're spot on - the people you choose to work with will be the most important, and most difficult, aspect of your plan. They seriously can make or break your investment (this is true of turnkey as well, but then there's only one team to vet).

My only comment would be that perhaps you should focus on the people a bit more than market. Of course I'm a fan of the South, but since the people you work with will be most important, I would maybe drill down to a couple different markets (even in diff states) where you see numbers that meet your needs and then switch to focusing on people, let those choices pick the market for you. You'll be better off with an agent and PM (and contractors) that you connect with and trust to do good work than you will be in *the* market that meets every single one of your parameters. If you can find both in one place, great! If not, I'd opt for the best people first.

Good luck!

Neel Jain · Answer

Along with learning and researching, another yuuuge factor for OOSI is having 'boots on the ground'...perhaps the biggest factor.

Neel Jain · Answer

Thank you, Ali Boone.

Idea is to drill 'spectacular service to the tenants' into my Property Manager's head!  Tenants' interests, comfort and safety will be paramount.  I will be looking for a property manager with similar thinking..

Out-Of-State Investing - What Is Your Process?

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