Buying Out of State Rentals

[Anthony Van Gilder]

Happy Friday to everyone on BP. Since I'm looking at buying OOS the best way for me to view the property to make judgments on it is through a realtor taking video of the property and sending it to me. My question is how do I make an accurate summary of repairs based off that? Will I have to do my best looking at everything, make my estimate on repairs, make an offer, then hope the inspection aligns with my estimate? This so far has been the most confusing part me. Any advise on this process would be greatly appreciated.

[Dave DeMarinis]

@Anthony Van Gilder There are a ton of very smart and successful investors in the forums with opinions on OOS investing. I invest both local to me (California) as well as OOS (Dayton and Huntsville). I think I have an equal number of people telling me I can't cash flow in California as I have telling me I have to be local. Either one can be very successful. Here are a couple keys to success.

#1 - pick something, focus on it, execute and do it 
#2  - if you go OOS, research areas and pick 2 to 4 areas based on your goals and criteria. Then try to make contacts (PM, agents, wholesalers and contractors) - wherever you get the most traction - make that your area and focus on it. 
#3 - read @David Greene book on Long Distance Investing
#4 - have sufficient reserves (9 months of PITI and Utilities and 20% of your rehab bid) - everything will take longer and cost more than you estimate. It will get better with time, but if you don't have the reserves - you will be sunk.

I don't know a single person who failed at real estate because they chose the wrong market! Not one. Failure typically comes from either a lack of $ reserves, a poor performing/dishonest team or a lack of ability to communicate with and manage a team. Or worse yet, the trifecta of all 3.

Lastly, once you pick your market- spend at least 5X that time on choosing your neighborhood, street, block and house. Team and market specific location are WAY more important than market selection.

If this all sounds too complicated, focus on finding a great turnkey provider and go that route. There are plenty of paths to success if that is what you want to do.