Long-Distance Investing While Considering Personal Relocation

[Jason Wolohan]

Hey BP Community!

We bought our first investment property in June 2021. It was an out of state investment in which we had some family in the area (northwest Arkansas). We had a builder offer a multi-house discount and we locked in a price before the pandemic ramped up. Although it was much more delayed (a whole year) because of issues breaking ground on the community and then hindered distribution lines for materials, it ended up being a good deal for us.

We’re getting a 13% CoCROI and the appraisal came in for 8.5% higher than the purchase price. This is a LTR.

As I look at what we could have done better and preparing for the next investment, I’m curious for some input from the BP community:

• - When you’re investing out of state, do you build relationships with banks local to the area you live or where you are investing? In our first deal we just went with the builder’s preferred lender because they offered to pay our closing costs if we did.
• - When you're setting up an LLC, do you get the mortgage in your personal name and just have the LLC on the deed? Do you do this after the fact or during the process? Right now, both the deed and mortgage are in mine/my wife's name. How would you go about transferring to an LLC?
• - For those of you investing in STRs from afar, how do you get the property setup? I’ve found plenty of resources for the management of them, but not as many on the initial setup (from a distance). Do you travel to them to close on the property and spend some time doing the initial setup yourself?
• - How do you find off-market deals out of state? I’m not opposed to driving for dollars or local meetups, but those are not feasible from a distance.

Between now and the end of the year, my goals are to:

• - Read four REI books, including David Greene's Long-Distance Real Estate Investing
• - Analyze 200 deals in areas that we’re interested in purchasing some STRs
• - Build a relationship with some banks and real estate agents

My goal in 2022 is to purchase two or three properties. Preferably, at least two of these will be STRs in a vacation destination where we can build a proof of concept, get our processes setup for managing from a distance, and then attract other investors with capital to share in the proceeds of future deals.

Financially, we should be ready to pull the trigger on our next property around February/March. Also, now that my W2 has gone fully remote due to the pandemic, we’re considering relocating our family out of the DC area and settling down in the Carolinas somewhere. We’re considering the Smoky Mountains as an area for STRs and potentially landing in the Greenville, SC area, where I’d also like to find some LTRs. If anyone is familiar with those areas, I’d love to hear your input.