Out of state investing - Where do I start?

Question

Been lurking for a while hearing about so many people investing outside of their backyard and am intrigued but where does someone get started in looking at investments out of state?

There are so many turnkey programs but I feel like so much of the equity is lost going that route. Exploring Loopnet, realtor,com, zillow, craigslist all seem like good options but are those doing this finding it best to target specific markets or just a deal in general.

Additionally, if you purchase a place that needs rehab, how are you managing that from afar? Really just curious on where to get started, looking to acquire a 5+ unit

Any thoughts on markets? I am thinking Philly, Charlotte, Raleigh - staying at least on the East Coast but really no reason for that. Prefer apartment buildings to SFH's.

Thanks in advance for your input

Josh Bell · Answer

I have a full time 9-5 job as a software engineer. I have flipped 3 properties outside my home market of Utah in Tennessee and Florida. I started looking outside of Utah because the market is saturated with investors willing to bet on appreciation. Is there still deals in Utah? Definitely. But with a full time job it was difficult to spend the time searching.

The advice I'd give you is build a strong team of relators and contractors. They are your eyes and ears. If you can't trust them then your projects will go south quickly. Never take anyones word at face value. Always verify. We have a 2 step verify process. For example, if a contractor wants to be paid on the completion of a portion of the project we need detailed pictures as well as we send the realtor to take pictures and verify every item is done correctly and the realtor would sell the home with the condition of the item.

Its been a challenge but once you get your processes in place you have now opened up opportunities everywhere in the US.

Rob D. · Answer

Im struggling with this myself.  Most of the turnkey operators on BP and elsewhere are running the model so close to the 1% that in my mind the upside is eroded.  So difficult.

Matt K. · Answer

This often gets overlooked and people rush to find the best market.... figure out your budget first. No matter how awesome or amazing the deal is it won't mean anything if you can't fund it.Once you figure out your budget figure out where you can get the best property that fits your goals/attitude.

Vivek Khoche · Answer

@Erik Harrison and @Bob Mazza - Having day job is no crime, don't combine two evils into one. OOS and Dream Merchants+ Agents Layer. Start from your back yard get educated then a pull the trigger so that you know what you are buying.

I try to pretend seller for similar property that I want to buy. There is no free lunch on this earth, don't buy experience with your hard earned money.

Good Luck

Vivek

Matt K. · Answer

turnkey is hard because if you don't do due diligence you increase your chances of getting burned.... the more due diligence you do the less value their is in the TK service.

Bob Mazza · Answer

@Metra Ulloa thanks for the tip on the turnkey site, I will take a look. In cruising the forums I have often found @jayhinrichs opinions to be valuable

@Rob D. appreciate you sharing the same feeling, maybe the site just shared - http://turnkey-reviews.com/ - will be helpful

Erik Harrison · Answer

I have thought about this as well. I am new and I am looking to get into something that makes sense. I have a 7-5 job and I'm a single dad with 3 kids. I haven't posted yet but, I am definetly looking for advice on which way to go in real estate with my limited time. At the moment I am just trying to educate myself as much as possible. Turnkey seems like a good option. Bob, Thanks for the post.

Bob Mazza · Answer

@Matt K. thanks for the input. I have always found knowing your budget is smart but every scenario is so different...I have a rough idea but never like to let it limit things given the possibility to get creative.

@Tom Ott appreciate the input on turnkey properties. Having a 9-5 I understand the value add but always feel like I am missing out by going the turn key route...if I do I will look for those that handle everything in house.

Appreciate the responses.

Tom Ott · Answer

it depends on what you are looking for and what you have time to do. Many who go turnkey are investing out of state and work a 9-5. They are not ready to become a full time landlord or flipper. Which will be a full time job no matter how hard you try. Investing in turnkey allows for everything to be passive. If you do go that route, make sure the company is a true turnkey provider and not just using the word to describe a property. Ideally, they should own, renovate, and manage the property all in house and they should not use any third parties.

Try looking at:

The Best Types of Markets for Profitable Turnkey Properties

and

What to Ask When Working With a Turnkey Provider

Out of state investing - Where do I start?

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