Out of state deal, looking for some advice

[Caleb Bryant]

Hello Bigger Pockets family!

I am a young investor from Nashville area Tennessee and I am pursuing a few deals in the Jacksonville, Florida market in the multi-family segment. I have a few deals available to me and I am flying down this weekend to inspect the market more thoroughly on the ground. I have a few questions for anyone who has experience investing in 10+ unit apartment buildings out of state:

1. When interviewing a property management company, what are some specific qualities you look for, and do you have any specific questions you like to ask them?

2. Any key things in a neighborhood that you look for and what things in a neighborhood do you like to avoid? i.e. I don't like being near storage facilities or dry cleaners because who knows what hazardous materials have leaked into the ground and spread. 

3. Any general advice on what is most important to do during a two day market analysis trip?

Thanks in advance!

[Todd Dexheimer]

You should be meeting with as many of the local commercial brokers as possible as well. I would say they will give you the best run down of the market and area (they are sales people, however). I like going to a new market by setting up a lot of meetings with Realtors and viewing deals and looking at neighborhoods. Typically I spend every waking hour driving the city. 

For Property managers - experience in 5-50 unit buildings and current amount of units under management. How many units do they own (I like a low amount)? Years of experience? Asset class they manage the most? Do they have in house maintenance? Do the have renovation/value add experience? What are their charges (some companies will nickle and dime you)? How do they find new renters? Average turn over time? Typical vacancy for the area your investing? What area they seeing in your sub-market for progress, other properties being renovated, jobs, new business, etc? 

Key things for a neighborhood. This is a bit harder, because I don't know what you're looking for, but ask the Brokers/PM's to send a Costar report of specific target sub markets. Also ask about employment in that specific area. What are the main employers the residents are working at. What is the demographics? Population decline or increase in that sub market? Crime? Affordability index? Typical market cap rate for stable buildings, Vacancy in that sub market, economic vacancy? Are there new jobs coming in? What is the cities comprehensive plan? Are there new shops or shops/business that recently left? 

I feel like the most important part is to have your boots on the ground to figure out what the sub markets are that you like and don't like. For me, when I am going into a new market, it is all about hustling. I don't sleep much for the 3-4 days I spend in a market the first few times, because I am learning about the city.