Investing Out of State

[Ilya Aksenov]

  Hi everyone 

     I just finished listening to BP podcast #73 with @Mehran Kamari I loved hearing about his investing out of state and how he does it. 

   If anyone is an out of state investor Do you have any advice for a new investor looking to do business out of state. Or maybe just share a little bit of your story. 

  And what are some good real estate markets around the U.S. for a buy and hold investor looking to build cash flow. 

            Thank you for you time

[Hattie Dizmond]

@Ilya Aksenov

I agree with what everyone else said.  However, I'm also standing on the other side of the fence.  I don't invest outside of my own area.  Being in DFW, there's really no impetus to go elsewhere.  However, we've developed a nice niche business helping out-of-market investors exploit the growth and stability of this area and its RE market.  After talking with a lot of out-of-market investors, here's my advice in building your ground team(s):

Trust - find people you're comfortable with and trust.  That doesn't mean you don't verify, but you simply can't feel like you have to be looking over their shoulder all the time.  It won't work.

Compatibility - find people who share similar beliefs and approaches to business &/or life.  There are investors we have chosen not to deal with, because I felt they were not entirely ethical.  My belief is, if they will screw someone else over, they will eventually do it to me.  Plus, my reputation is too important to me to work with someone who could taint it just by association.

Local Market Knowledge & Connections - we all know this is an industry built on relationships.  Find someone who has contacts and connections in the local area.  Also, find someone who can confidently point you to specific sub-markets & micro-markets, simply based upon your investment criteria.  If you are forced to lead the search from a distant market, what good are they?  They should be able to recommend key members of the team...realtors, contractors, title companies, etc.  You don't have to use their recommendations, but it should help give you confidence they are plugged in and clued in!

Transparency - look for people who will give you honest, straightforward answers to questions.  Look for people who aren't afraid to tell you they don't know, but they will find out.  Find people who will disagree with you and aren't afraid to tell you they disagree.  In the end, if you're spending your money, it's your decision.  However, no ground partner worth their salt should let you make a bad decision without offering you an honest, straightforward word of caution...or 2.  And, be leery of people who are all sunshine & rainbows.  Dallas/Ft Worth is an incredible market, but I tell every investor I work with that Buy & Hold is really tough right now.  I'm not trying to discourage them from investing in DFW, but one of my jobs is to inform them of current market conditions and level-set their expectations.  

Good luck!