Question for people who've invested out of state

[Patrick Britton]

I would greatly appreciate any feedback and advice from those who have invested in properties outside their own state. I live in WA and am looking at MI, IL, KY and FL. Looking for MFR properties that cashflow well, but are also in above average areas.

What were some issues you had, if any?  What would you have done differently?  What would you tell someone like me?

thanks! 

[Robert Clifford]

Patrick,

great questions. I invested in my first property while living overseas so I know where you are coming from. I have three points that I would share.

1) Make sure that you research the areas that you are going to invest in thoroughly. If you have never been there, you should learn the city/maps/economics of the area/look at hundreds of listings to understand what the market is like. Learn what each of your monthly expenses will be on average and learn what something will rent for in each neighborhood your interested in. Don't let anyone do your number crunching for you. Have a mentor double check your work and ask experience property managers what they think they would be able to rent something at. 

2) Build a team on the ground. Look around for who will work best for your needs. Take references from people but be sure that you have a number of different people who don't work with/for each other. In other words, your realtor, property manager, home inspector should not have a habitual relationship or be the same person. You need to have multiple different independent accounts of what a property looks like, inside and out, and what the properties potential is as a rental that will meet your investing needs. 

3) Try to get something as turn key as possible. I would never trust a property manager/contractor to supervise a rehab project while I was not around to check in on them every now again. That's a recipe to get taken advantage of. Ultimately, you may need to have some serious work done, but you can shop around for someone who is rated well on angieslist or other resources. Get multiple quotes and have them tell you what their analysis of the real problem is so that you're not replacing an A/C unit when you just need a part changed out.

Lastly I would say, my biggest problem was analysis paralysis. When you see a property where the numbers are solid, have a bias for action and if you find something that meets your criteria, jump in. Its the best way to learn.  

Good luck.

Robert