How did you start as an out of state investor?

Question

Hello fellow Bigger Pockets member!

I am fairly new in this community and decided that 2020 would be my year to start on my real estate journey!

Living in a very expensive city does not help, so I was looking for advice on how to start investing out of state or what steps you took when you started!

Personally, I am looking more to buy in OH, NC or IN.

For a first property, I am thinking of putting no more than a 100k.

Where did you buy? How much did you put in your first property? Did you do some rehab even while being out of state?

Appreciate the point of view!

Karl B. · Answer

Hi, Abdoul. Welcome to BP! I grew up in Erie, Pennsylvania and started investing there (despite living in California). I have family there and they help me from time to time when I'm not there.

If you have any family/friends living in OH, NC, or IN that would be awesome. Property management companies are often notoriously bad - there are some good ones out there but many stink.

And so if you have family/friends who can show a vacant apartment for you or keep an eye out on your property once it's rented, I feel it's the way to go (you can pay your family friends for helping you).

Of course, if you don't have family/friends in those areas don't feel defeated - just do a lot of research for a good property management company.

I bought a 4-unit in Erie. It was half-vacant. I put 20% down and it needed work. I did some repairs and I hired a few tradesmen (handyman, electrician, plumber, etc.) to fix the place up as it needed some repairs/upgrades because the two prior property managers did not take care of the place and the owner was living out of state.

Any questions, let us know! This is a helpful forum.

Caleb Brown · Answer

@Abdoul Guisset

If you ever looked into KC I’d be happy to help :)

Karl B. · Answer

I found both of my handymen on Angie's List. The original guy is great and I hire him whenever he's free and work needs to be done. He charges me $30 an hour which is decent and he does good work. And he has a helper so work gets done faster (when they work together I pay the helper $25 an hour).

The second handyman charges more but I hire him when the main handyman is busy.

Both do good work.

I recommend review sites. Of course, on review sites like Yelp one must look at the filtered review for the tradesperson/company. If a Yelp page has a lot of filtered reviews VS reviews that are showing that can be a red flag they're buying or trying to write positive reviews.

But I've had good experiences looking for tradesmen on Yelp, Angie's List, Google Reviews and even Thumbtack.com

Finding a good realtor is trickier. A lot of realtors have good reviews and I've found part of finding a realtor I like is liking them as a person. I've been around a few realtors who were seemingly competent but I didn't jive well with them. If you can find videos of a realtor you're considering watch them to see if they're someone you'd like to work with.

My realtor in Columbia, MO had pretty much zero reviews but I happened on him through a listing for a property. I liked working with him and he was pretty darn good when it came to making the deal happen and so I would hire him again. Also, he's not just a realtor but a broker. He's the first broker I've worked with but if I enter another market I would like to work with a broker to see if brokers are superior to non-brokers.

Abdoul Guisset · Answer

@Karl B. Thanks for sharing! It really reassure me to see that we can safely invest out of state.

Just like you, I know some people in the areas where I am looking to buy so they can at least go and take a look from time to time.

When you looked for handyman did you look through particular site or just asked your Realtors for advice?

Also is it typical to “shop around” for real estate agents?

Appreciate you sharing your story!

Abdoul Guisset · Answer

@Caleb Brown @Caleb Brown I did not read that book from David Greene yet thanks for sharing.

I did start on contacting agents and benefiting from their network. But it’s not always easy to vet an agent

Charles Carillo · Answer

@Abdoul Guisset

I believe that when investing out of state it is most important to put together your team first before looking at properties. Normally you can find most of your team after finding a broker and using their referrals.

Caleb Brown · Answer

First read "Long Distance Real Estate Investing by David Greene". He goes into detail and is very thorough. Next you need to pick a market with growth, stability, cash flow, and somewhere you like overall. Ask yourself if you'd live there. Next you want to build a team of PM, Realtor, GC, etc. They are your boots on your ground and your eyes. You can visit the market but the team will be the ones who know the local market and will help you. From there it's about scaling. It can be nerve racking but best of luck.

How did you start as an out of state investor?

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