How Does a Long Distance Investor Work With General Contractors?

Question

Hi all, I live in California, and am looki at several good deals in Michigan. This long distance deal will be the first I have ever done. Ideally, the property I buy will be turnkey, but I have a feeling that most of the deals will need some rehab. How do you go about getting a quote from a general contractor if you are long distance? Will the GC take a look at the house and give you a quote if you have not yet purchased? I don't want to buy a house that I think the rehab will be very minor on, only to realize the rehab costs will be major.

Any help is appreciated!

Thanks,

Nick

Any help is appreciated!

Thanks,

Nick

Thomas S. · Answer

I would advise the cost of a plane ticket and some vacation time if you really want to invest long distance. Otherwise you need a trusted partner on the ground in the location.

Trust is only extended to those that have earned it.

Stewart Beal · Answer

Hi Nick I own a construction company.  If an investor wants me to provide a quote but does not yet own the property I charge $250 which can be applied to the eventual bill should I eventually get hired.  What I do is go to the home and take pictures of everything that needs to be done and then provide an itemized estimate of everything that can be done. That way the out of state investor can look at the pictures and the estimate at the same time.

George P. · Answer

we do lots of work in livonia, Westland and garden city.  we rehab homes for other investors all the time and give e them turn key rentals.

let me know if you want me to send u some before and after pics of the projects.

Account Closed · Answer

You can get deals right in your backyard. Sfr for 40-70k renting out at 700-1k a month. Stay in CA for your first investment so you can get a feel for what is involved. If you need more help feel free to reach out. $250 seems high for pictures of a property and estimates

Meg Epstein · Answer

Hi, I live in California and Nashville and have projects in both. These days, with FaceTime, etc., its easy to have jobs remotely.

Alex Franks · Answer

Controlling ,the numbers Is everything. First and foremost hop on flight. I would want to see the quality of work from every contract. Seeing at least two types of  projects from the GC. Current , finished , an referrals. I would hit some local meeting ,when flying into that market.

This was an older post but more about building a team , or buying turnkey

I hope it helps.

Two ways of looking at this first and foremost, I don't have anything to sell. So that helps with my opinion. I was turnkey guy back in 2010-2013. Sure this is possible to achieve by yourself just demands a lot more time and knowledge of creating your own team.

Turn key is exactly that, a cash flowing asset from day one. You are paying a company to take care of that for you. On the flip side, you will have to do this all with your team that you are creating if you do things yourself. A lot of moving parts at one time.

Building a decent team, which I have seen many folks do from out of state. Starting first with a very knowledgeable real estate agent. I want one of the best in that market, but one who understands investing (and owns investment properties). Keeping in mind everyone who works in this business is trying to make a living. So what can you offer that agent. They are going to be the one who brings you deals. They most likely will have some contacts for good reliable contactors.

Next is find that property management company. You will need to always interview at least three. This is a major hurdle for most investors. Trust me this is a big one, being they will take care of your assets.

Next is to build a team of local contractors, handyman, and general labor guys. Lawyers, appraisers, and inspectors will also be needed. Again a solid real estate agent , who has a decent team. Will have all your needs. They are just not going to run your job for you. Their job is to sell homes. So that responsibility will fall on you.

Again, I see this done quite often but just demands a lot of detail and well thought out planning.

Funny thing, is all this can be achieved by flying into local markets and attend a few local meeting. Most of the folks are more than willing to share this information. Slowly building relationships with the people you choose to work with.

Now on the flipside, education is the key, understanding the markets, and what is happening. If I could add on peice of advice do not touch lower end investments, because of price point being attractive.

Just this past week I sat with a California investor, who was trying to do this same process. He was using his personal funds. Being the agent was fairly new , she over priced his sale comps on price per sqft . It took me less then 5 minutes of searching to realize his house was $50k to $60k over priced. Which he did not want to believe until he came in last week.

Please ask away if any more questions. I made the jump to commercial but I closed and old over 800 units in my career. Majority of these were turnkey deals .

Alex

Tom Olszewski · Answer

I had the pleasure of working with George P who responded above and would recommend him for future projects.

Nick Zocher · Answer

Account Closed Are you marketing to motivated sellers to find these, or auction, or finding them on the MLS or elsewhere? I have not found those deals in the bay.

Nick Zocher · Answer

@Stewart Beal @George P. @Anthony J Pisco Stewart, that was very informational, thank you. The $250 is not too bad of a sunken cost for that knowledge, especially when it can be applied to the bill if the job goes through.

It looks like all of you are a ways away, but if you do any work in Southwest Michigan, I would definitely love to connect.

Thomas S. Thank you for the advice. Buying sight unseen long-distance definitely seems like it can get risky. Thankfully, I have family in the area that I am planning to buy, and looking for a solid agent who I can work with for an extended period.

How Does a Long Distance Investor Work With General Contractors?

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