Buying & Selling Real Estate
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated about 5 years ago, 12/12/2019
Out of State Real Estate
I purchased a triplex July 2018, with the intentions of flipping it and making a killing. I purchased it right, numbers looked good and pretty much a slam dunk to make at least 100k. I had a partner that was going to come in and help with renovations, but after I purchased the property he backed out.
I fixed the place up as best I could fixing 2 of the 3 units, but the 3rd unit is unlivable (in my opinion). I've now decided to just cut my losses and sell, and with the new gained equity its possible ill break even.
I'm now looking for a new investment property and realized I can get significantly more units out of California. I am very interested in this idea, and have been scouring the market and have looked at hundreds of properties over the last week finding properties with promise.
I am hesitant as I have never invested out of my state before and don't really know the pit falls or things to watch out for, can someone help me with some direction on what to consider during my purchase and hold process?
Thank you in advance.
A few things to consider in reference to the "properties with promise" in out of state properties:
1. how is the area? You will need local help for this if you are not familiar with the good and bad areas of the town/city. Might not make the return you are looking for if there is no promise.
2. Get a contractor's commitment on how much it would cost to fix. This will help you avoid running into the same situation as you did with your friend and you will have actual solid numbers to calculate your ROI.
3. If it is too good to be true, most likely it is. (Everyone is looking to capitalize on flipping homes. if a property looks too good, why is it still available?)
4. Run comparable properties and see what they sell for. This can help you to identify actual selling price rather than what you would want to sell it for.
5. How many times do you have to go there in person? (This can add up when you have to travel far or fly multiple times to manage the contractors/workers)
6. familiarize yourself with local laws/rules. You don't want to find out you cannot sell because of some state law that prevents you from doing so.
Good luck.
Welcome to Bigger Pockets!
Have you listened to episode 301? The guest Alex Felice covers out state investment very well. I have recommended it a number of times.
- Real Estate Consultant
- Mendham, NJ
- 7,193
- Votes |
- 6,309
- Posts
You have to take a step back before you make another mistake. Your first deal was an absolute disaster and only by luck might you escape with a break even. And that was local. Now you want to go into a foreign market with no help and do it again? First, you have to pinpoint all of the areas you made mistakes on your first deal and think if you can solve them by going out of state. You also said you have looked at a lot of deals, but looking online isn't evaluating deals unless you are an experienced out-of-state investor. If you have seen no properties out-of-state in person and don't know the neighborhood, the block dynamics, the city growth from those inside the city, you haven't see any properties. Don't be so eager to invest that you make another bad play. From what you said above, there were more issues with the first deal and I'm worried about what that renovation looked like.
- Jonathan Greene
- [email protected]
- Podcast Guest on Show #667
All great information so far and I truly appreciate it and am humbled.
Mr. Corbaxhi thank you for your time and response, the information you offered is greatly appreciated and accepted.
Mr. Goretzki, no sir I have not yet checked out that episode as I am new to Bigger pockets and am still learning the program. I will watch the episode today, thank you for your time sir.
Mr. Greene, you are absolutely correct! I will be very fortunate if I break even... I am new to the real estate investing world. The triplex was my second property, and the renovations done on the two units were very minimal (lipstick). The tenants are very low key, and pay their rents on time.
I have no mentor, which is why I'm here, and I use to be homeless (but everyone has a story). I digest a book a week currently and read 60 books last year. The only help I currently have is a friend that is a real estate broker. I have been looking for out of state properties not to fix a mistake, though I have made many, but because of the bang for my buck and tax purposes. I am considering leaving Ca, and have been for some time. Thank you for your honesty, and any future help or advice you can give is most excepted.