Advice on Remote Investments - Any seasoned Investors?

[Tychua G.]

Hi Remote Investors! 
I have been a long time reader of BP and have spent an enormous amount of time reading books and analyzing prospective deals out of state but unable to get clarity on the obtaining the tangible advice on obtaining the right resources to move forward. I understand that "staying local" is often preached around here but this is not a viable option as I am situated in CA and would not make sense given the high barrier to entry and negative cash flow aspect of it.

If you were flying solo, meaning no friends or family in the remote state, how did you get started if you have confirmed that the selected area is worth your time and money?  The common answer I have seen is to network in the community but that still leaves a lot of question like how to source General Contractors, Management Companies and Agents you can trust for a long stretch of time.

I am seeking advice from those who have successfully overcome this hurdle with possible actionable items for me to move forward on this journey!

Thanks!

[Raman Saka]

Hi

I can totally relate to the situation you are facing. For me, I am in WA (king county) . The real estate market has been on fire and its impossible to have +ve cash flow given the prices and rents. So last year I researched and locked in on DFW area for future investments. Here are some do’s and don’t’s from my experience.

Do’s

• Get referrals for Property Agents , brokers and real estate firms you want to work with. In all appreciating markets there will always be people who want to make quick money instead of putting in the hard work needed in this business.
• Interview lots of Property Management companies, even after due diligence be ready to change PM’s when you are not getting the kind of attention and information.
• If you have found these 2 then you are on solid ground, most PM will take care of handling the contractors. Good ones don’t need too much supervision, but in my experience you will have to show PM’s that they need to earn your trust. Early on I found double charges, numbers not adding up all the time, but once you build the repo your PM should adapt to providing the level of details you want in their reports.

Don’t

• I did a blind leap of faith based on redfin, some county data research. Insist on better ground report and ensure neighborhoods, schools , crime and drugs data. In my search it will be tempting to see similar property coming in 20K cheaper, don’t fall for that. There always are reasons for discounts and sometimes the reasons will be out of your control. For example if you found about the crime in area after a property is under contract.
• Be careful and don’t have all the dependency on the agent or broker you select- I mean don’t always use the property inspector and lender who are friends with the agent. Get to know these people from other networks or acquaintances. You want to ensure that across your team your interests are looked after. Sometimes if you see that you have most skin in the game BUT are always getting paid last then challenge that status quo and change it.

OOS seems scary and it is because you have lesser control and there are more variables. But with the right team, you get cushioned from day-to-day hassles of being a landlord as well. There surely will time when that 6-8 % management fees seems like the best money you spent.