Investing in real estate from afar? Successes? Mistakes?

Question

Hi,

I live in Hawaii and would like to invest in Oregon, preferably buy and hold. I'm just getting started and Hawaii (so far) seems to be a tough place to get started (unless you have a lot of money).

So, I'm learning as much as I can about the possibilities and impossibilities of doing this and thinking about niches and business plans to get started. If you have stories to share, advice, mistakes, or successes for my encouragement, I'd love to hear them.

Thanks in advance!

-Brooke

Laura Williams · Answer

@Brooke Gibson I think I'm pretty qualified to speak on this as I have owned a rental in Buenos Aires and properties in South Africa as well as currently the Midwest. I have had almost all good experiences with one very bad. The key is management. If you find the right people to work with they can potentially do a better job managing than even yourself if you lived there. The problem with investing where you don't live is that it's much easier to get taken advantage of cause you can't be on top of them 24-7 if they're being shady or lazy. And everyone knows that this business is filled with a lot of dishonest people and horror stories from the novice investors. The mistake I made was not doing enough research on a person I chose to work with because I had been told by a BP article writer/podcast interviewee that this person was a good guy when I emailed him for a recommendation. Being from New York it's not in our nature to lie and say someone is OK when they're not so I was blind sighted. So the lesson is not take any shortcuts on vetting people no matter who is recommending them and you should be fine. All my other experiences have been very good so I'm pro investing out of area.

That being said there's lots of good first time homebuyer programs out there with low fixed interest rates and low down payments. That might be worth checking out if it could save you some money verses renting before you take the plunge into long distance rentals. One agent in NY told me of a program where the city will actually give you part of the money for the down payment if it's your first home.

Brooke Gibson · Answer

Thank you everyone for your replies! It's so much fun to hear your answers, they're all very helpful.

@Giovanna Owen, Imagine driving from the outskirts of Portland through Sandy and down to Madras or Redmond. That's the whole area I'm thinking of. However, Madras or Redmond might be more convenient, but I'm looking at it all.

-Brooke

Giovanna Owen · Answer

Hi Brooke,

I live in Oregon. What part were you thinking of investing in?

Giovanna

Engelo Rumora · Answer

Hi Brooke,

Here is a blog I wrote for Bigger Pockets about my biggest mistake when first starting out.

http://www.biggerpockets.com/renewsblog/2015/05/02/biggest-mistake-starting-out-real-estate/

I hope you find it useful.

Thanks and have a great day.

Michael Borger · Answer

Hello, @Brooke Gibson. There are always ways to get around the high price of Hawaii. If wholesaling, like how I got started on Oahu, then it's actually better because you're getting higher margins while still using other people's money. However, if you're in it for the cash flow, then you already know Hawaii's not the best place to sink your time and energy, despite the occasional nugget. As others have already stated, it comes down to two key items: 1) market education, and 2) quality management. Good luck.

Joseph Gozlan · Answer

in my opinion, being the your first property, i'd stay close to home.

you WILL make mistakes and it WILL cost you on your first property. It's just the nature of learning the business. We all went through that ( and keep learning everyday)

I'm not saying it's impossible. It is and has been done before, it's just a matter of trust, team and systems.

You must be able to identify a team that can handle the management on your behalf that you can fully trust and has great systems in place.

Trying to find a plumber to show up at 2AM when the tenant is calling panicking that the water heater is leaking all over the basement is very hard in your own are let alone thousands of miles away...

Just my .02

Allen Maris · Answer

Hi Brooke,

I have a long distance rental and also just sold a long distance rental. I'll say, one of them was a big pain because the management wasn't very good and I had to travel there twice and should have been 4 or 5 times but I held off because of the cost and inconvenience.

The other place, I did the final walk through when I purchased it and haven't been back in 5 years. That one has good management in place so they deal with everything.

Moral of the story is if you have great management, it may not matter where you buy. But be prepared to travel if things go south. Which makes it a lot more of a headache and costly to do.

Good luck.

Allen

Investing in real estate from afar? Successes? Mistakes?

Investing in real estate from afar? Successes? Mistakes?

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