Investing out of state -how did you do you first deal/get your team together?

Question

Per @Jon Holdman - I'm reposting my post from a "buy and hold thread"

I am not philosophically opposed to investing away from where I live (and since I'm right around D.C., that's probably going to have to happen because of prices around here!), but I'd LOVE to hear how those that have done this did their FIRST out of state deal, how did they get those "teams" together that you obviously need to rely on, and any "war stories" they'd like to share about it. We are sitting on some $ that we want to put into a buy and hold . . .and we're trying to decide where to do it.

Ralph R. · Answer

Sorry posted before I was done What I was trying to say was you have to start some place. Work your deal much the same as you would at home. Look for ethical people you can trust. How do you decide that in your home area? I make a trip or two to Colorado every year. I visit Realtors in different citys, and try to see propertys in different areas. I spend 1 or 2 days looking, and time vacationing also. At home I look up information on different areas online. Interestingly enough I bought 1 property from a tip through my loan originator, and 1 through my PM. I don't try to work fast, and make sure what I am buying is going to work for me. To begin with don't buy what you haven't seen, you need to go check it out. If you are uncomfortable then DON'T buy it!! In the begining I looked every time I bought, but now I have used the same people long enough that I trust their judgement. They know I will use them again, and can't/won't use them if I get a lemon. Part of their future success is dependant on my success as well. I would now buy based on their judgement, without a trip to verify the purchase. When I buy in a new area I go look! The rules are still the same as when you buy at home. I research several propertys, and realtors as much as I can at home, then I make a trip to go Look. hope this helps rr

Lynn McGeein · Answer

We started researching growth areas within driving distance, narrowed it down to 2-3 based on other statistics, home prices, median income, biggest businesses there, rents in the area, etc. Chose the one closest to us, Raleigh, only 2-3 hours away from where we lived at the time, and took a few weekends going down and familiarizing ourselves with the area, took current listings and drove the neighborhoods before contacting any agents, got comfortable with the area, decided on neighborhoods. Some of them were alarming. Others were just right. (and learned quickly you have to physically see the property, internet listings were very deceptive -- I don't know how people buy sight unseen). Had to work with several agents and lenders before we found ones that seemed knowledgeable about investing. Once we found a good agent, one who knew the area really well and knew what we were looking for, he'd call us when he found something that fit. I'd drive down to see it, my husband would go, too, if it was Fri - Sun. There were only a very few that met all our criteria, anyway, so we were only driving down once or twice a month. We did miss out on several at first because we weren't the first offer, so it took a few months, but we did finally buy the first one. The agent knew a good handyman, and that guy knew a great flooring guy. Just kind of grew from there. Messed up choosing the first property manager, had to switch, but now we have a great company and very happy with our investments.

Lynn Z. · Answer

Thank you, Ralph, for the info. :)

Ralph R. · Answer

Lynn Z. Lynn I wanted to pre-approve for a loan prior to buying another Rental. I contacted the loan originator and told her I was looking for another rental in Co. A few weeks later she sent me an e-mail saying she knew of a realtor who had found some propertys for her son. He had a good deal on some houses, was I interested? I said yes and it went from there. I ended up with a house, a 2 year tennant, and she got another loan. The realtor got a commission, and as he was a PM. he got another rental to manage. (He didnt work out as the PM and I learned a valuable lesson from him. pm me for more info.) I have a PM. in Pueblo. I was looking for a multifamily or SFH in Co. and told her so. A month or so later she said she had a landlord looking to sell a property, but it wasn't listed yet. She didn't want to loose the property as a rental. I got the man's name from her, and sent him an e-mail. I was not sure about closing without a realtor, so I asked her for a referal. It worked perfect. I hired the refered realtor as a buyers agent, and we just closed last month. The realtor got a commission and is lookig for another property for me, the PM got to keep her rental, I got a rented property and was secure about the property's vacancy rate, and condition as the PM. had been managing it for several years. Everybody wins. I believe it important that EVERYBODY involved gets something out of the deal, (besides money) This makes for better team work in the future. (oh I almost forgot, the same loan originator got another loan) RR

Lynn Z. · Answer

Just when I was thinking about out-of-state investing, here's the post. Thank you, Christina, for getting the ball rolling. @Ralph Ramey "I bought 1 property from a tip through my loan originator, and 1 through my PM." Hi Ralph, could you elaborate on this a little bit, if you don't mind? I don't quite get how PM/Loan officer can find the deals for you. Thanks!

Ralph R. · Answer

I currently have 3 rental propertys, and some vacant land in Colorado, as well as a piece of property in Texas, but I live in Alaska. I did live in Colorado and know many people there. Undeniably this does help. My rental propertys are split up into 3 different citys/ towns. I can buy, get loans, and insure all with the same people state wide. It has taken a couple years, but I have found and use the same people to locate, finance, and insure my propertys. When you have property out of state the real estate part is the same. Is the house worth what I have to pay? Is the roof good? Can I make money on it? Will it rent easily? Does it need repairs? How did you answer these questions when you bought your first property in your current area?? You use the same ways and means in another state. Research the market, talk to realtors, etc. You have to use the same methods here you are comfortable with at home. Most Realtors provide the same services....listings, prices, etc. Commissions in a given area are going to be close to the same.

Jean Norton · Answer

I am the queen of "Rehabbing Remotely"! If there is enough of a profit spread - meaning the numbers will work and there is room for mistakes - then I go for it. Yes there are war stories - the same war stories that happen right here at home - contractor leaves the jobsite, etc. But I have found listing agents and local resources very helpful.