What would you do with 30k as an out of state (&country) investor

Question

I'm just starting out and am focusing on education before pulling the trigger but I would be interested to hear from you what you would do with 30k as a foreign investor. What market would you focus on? Why and how did you choose it? I'm planning on implementing the BRRR method and hoping to buy my first place in the fall, but I'm open to hearing other suggestions.

Thank you in advanced!

Mitch Messer · Answer

Hi @Aviv Harkov and welcome to BiggerPockets!

Even before choosing a market or asset class or investment strategy, I'd want to have well-defined financial objectives for that $30K investment:

• Am I investing for growth or cash flow, or a bit of both?
• What's my overall time-frame?
• How important is leverage to me?
• What specific metrics will I use to determine success?

The U.S. real estate market is enormous, with hundreds of thousands of strong sub-markets and millions of great deals.

In my experience, the best way to get exactly what you want is to be as specific as possible right up front!

Mitch Messer · Answer

@Simcha Davidman I maintain that visiting each individual holding every six months is serious overkill!

Performing an initial trip to establish a solid ground team, perhaps, but the whole point of effective property management is not having to be physically present yourself.

Back in 2013 we did a great deal with an overseas investor and they didn't set foot in Atlanta for over a year. And that was before advanced tech like high-definition video chat and remote property monitoring.

I currently manage a portfolio of Atlanta investments, and I currently live two time zones away in Clovis, New Mexico!

Provided you select a local team of independent, best-in-class service providers all focused on serving you with no conflicts of interest or under-the-table collusion, I see no reason to spend your hard-earned profits visiting the properties.

Robin Casper · Answer

@Aviv Harkov I’ve been investing from Tel Aviv for the past 3 years. Before that Africa. I would only go to the US for 2 weeks/year. It’s definitely possible. But you’re likely going to need someone Stateside with a Power of Attorny that can legally act on your behalf. I’ve done brrrr deals where I bought a SFH for 20K-30k, put another 30k on credit cards or a line of credit and then had the appraisal come back at 90k-100k. A good place to look are tax auctions that most city’s host annually. Again the biggest part of this is finding someone trustworthy to manage your property and have POA for you. The second biggest part is finding the right contractor. The time difference is a kicker too when you work overseas so expect some late nights👍🏼

Jim Paulson · Answer

@Simcha Davidman Personally, I love the idea of buying property in a place I like to go visit twice a year so I can write off my airfare, hotel, rental cars, etc when I go check on my investment.

Matthew Irish-Jones · Answer

@Aviv Harkov. Most foreign investors cannot get a mortgage from a US bank and most foreign banks will not give US mortgages.

That means you will most likely be a cash buyer.  $30K cash is not a lot to buy a house.  There are some VERY cheap neighborhoods around the Buffalo NY market and 30K is still not enough to buy an asset worth holding.

Unless you have financing figured out, I would want more Capital before I invested.  You are in high risk territory buying a home for that price anywhere in the states.

Simcha Davidman · Answer

@Aviv Harkov, @Mitch Messer has some great points.

Another thing to consider is whether it's worth it altogether. If you get a really solid deal making 10% CoC, that's $3000. How often do you plan on seeing the property? Each trip will be at least $1k, if not closer to $2k, depending on where you're located and how long you stay. If you coming in every six months (I recommend more often than that), that's going to be most of your profit right there...

Whitney Hutten · Answer

@Aviv Harkov Can you do long-distance BRRRR investing?  Yes.  Though I would strongly suggest being in. a position to be able to hop on a plane to see a property or deal with an issue (even if you have the strongest team assembled).  That said, have you thought about value-add syndication investing? It's a longer timeframe than doing a BRRRR but you get to take advantage of scale, other people's money (including other investor's) and the fact you are investing in a business to run the property. PM me if you have Q's!

Ruth Blue · Answer

@Aviv Harkov

I would invest in a Cabin in E TN Pigeon Forge. That is what Im doing and my Mom does. She has 6 and I have my first one since Mar. Income generation is what we are working towards.

Aviv Harkov · Answer

@Mitch Messer, I agree it wasn't my plan to physically visit each property and drive for dollars but to work on building a team in the local market.

@Matthew Irish-Jones I'm also an American citizen with an American bank account so I am looking into how I could receive a mortgage despite living overseas.

Steve Kontos · Answer

@Aviv Harkov

Your questions really depend on what your long term goals are. There are some really great opportunities out there but if you lack experience, I highly recommend partnering on your initial deal.  You'll avoid certain mistakes and learn more without taking on the whole liability by yourself.

What would you do with 30k as an out of state (&country) investor

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