International investor - buy and hold strategy

[Jimi Rønberg]

Hi everybody

I am investing from abroad (non-resident, not US citizenship), and looking into a buy and hold strategy, focused in a single area (not sure if this is smartest) and on rental properties.

Since I am starting out (this is my first property investment), I am looking for turnkey rental properties, and my hold period will be at least 10 years. My initial investment (cash) will be $60-100k, and my own idea was to search for areas with properties that could sustain a minimum 10% ROI and are cash-flow positive, where the risk is minimized. I am open to also financing the properties, if that would make more sense. I will every year be able to invest more cash (from other investments) into properties (about $40k yearly).

How would you go about the process - what partners would I need to get this up and running, which areas, what type of properties ?

I hope you can all chip in.

Thanks.

Regards,

J. Ronberg

[James Wise]

Originally posted by @Jimi Rønberg:

Hi everybody

I am investing from abroad (non-resident, not US citizenship), and looking into a buy and hold strategy, focused in a single area (not sure if this is smartest) and on rental properties.

Since I am starting out (this is my first property investment), I am looking for turnkey rental properties, and my hold period will be at least 10 years. My initial investment (cash) will be $60-100k, and my own idea was to search for areas with properties that could sustain a minimum 10% ROI and are cash-flow positive, where the risk is minimized. I am open to also financing the properties, if that would make more sense. I will every year be able to invest more cash (from other investments) into properties (about $40k yearly).

How would you go about the process - what partners would I need to get this up and running, which areas, what type of properties ?

I hope you can all chip in.

Thanks.

Regards,

J. Ronberg

I'd imagine you'll want to hit up the turnkey markets in the USA. In no particular order I have listed some of the most popular markets for out of state or out of country investors.

• Cleveland, Ohio
• Dayton, Ohio
• Toledo, Ohio
• Youngstown, Ohio
• Cincinnati, Ohio
• Memphis, Tennessee
• Birmingham, Alabama
• Kansas City, Missouri
• Saint Louis, Missouri
• Indianapolis, Indiana
• Detroit, Michigan
• Erie, Pennsylvania
• Louisville, Kentucky
• Milwaukee, Wisconsin
• Jackson, Mississippi

The financing will be tough but there are 2 or 3 lenders that I know of that will loan to out of country investors so it is rare, but possible. One thing to note when looking at the individual markets, you can make or loose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property long distance you should do a few things to ensure it's as smooth as possible.

• Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
• Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
• Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
• Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
• Make sure your property manager is a licensed real estate brokerage.
• Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.