Buying out of state

[Eboni Allen]

I am looking to get the attention of anyone who has purchased out of state. Since I am just starting out with little money - I want to be able to accomplish something quickly within the scope of all cash payment. A Google search of cities with most affordable homes lists Cleveland as one of many. It's a big, I figured, so I started looking on Zillow. A cute 1950s home of 1000-1200 sf sells for $30-$60k! And rents for $900+ per month. Sounds like great cash flow. Buying out of state seems so poorly talked about on the podcasts. Does anyone have several good experiences of buying out of state? Let me know if that is your sole strategy. I googled the addresses of some cheap properties in Cleveland and it doesn't appear to be the "hood" on these homes. With a decent property manager, seems like anyone could bolster their buy and hold portfolio quite easily and nicely with cheap homes from other states. Am I wrong? Do I sound like an overly hopeful newbie? Sharad Mehta's podcast got me thinking. He has a huge portfolio in NW Indiana of all homes that sounds like he purchased in the $20k range. Granted he and his wife make good money - but my curiosity in this arena has less to do with the paycheck to back the purchase and more to do with how plausible/wise this strategy is for a newbie. Thanks Team!

[Sharad M.]

Originally posted by @Eboni Allen:

I am looking to get the attention of anyone who has purchased out of state. Since I am just starting out with little money - I want to be able to accomplish something quickly within the scope of all cash payment. A Google search of cities with most affordable homes lists Cleveland as one of many. It's a big, I figured, so I started looking on Zillow. A cute 1950s home of 1000-1200 sf sells for $30-$60k! And rents for $900+ per month. Sounds like great cash flow.

Buying out of state seems so poorly talked about on the podcasts. Does anyone have several good experiences of buying out of state? Let me know if that is your sole strategy.

I googled the addresses of some cheap properties in Cleveland and it doesn't appear to be the "hood" on these homes. With a decent property manager, seems like anyone could bolster their buy and hold portfolio quite easily and nicely with cheap homes from other states. Am I wrong? Do I sound like an overly hopeful newbie?

Sharad Mehta's podcast got me thinking. He has a huge portfolio in NW Indiana of all homes that sounds like he purchased in the $20k range. Granted he and his wife make good money - but my curiosity in this arena has less to do with the paycheck to back the purchase and more to do with how plausible/wise this strategy is for a newbie.

Thanks Team!

Hi Eboni,

Not all of my properties were purchased in $20k. Even though I purchased some properties in $20k range doesn't mean my total cost was $20k. The less I pay for the properties, the more work they need. I have had to foundation work, waterproofing, etc.

I started investing in NW Indiana because I used to live in Chicago and NWI for all practical purposes in a suburb of Chicago so I set up my business there. I live in California now, but I have systems in place where I can run my business from CA and still do 4-5 deals a month without any major hiccups.

If you are going to be doing this, you have to have a good team in place. There is no substitute for having good people in your team. You could have all the money in the world to invest, but if you don't have good people to back you up in your strategy, then more money will not save you.

I travel to Indiana once a month and have team in place to handle the day to day operations. 

But if I ask myself if I could have done this living from California and trying to invest in a new market without having good team, the answer will be no. I have had my fair share of bad contractors that I have worked with. Now I have built the system and team to the point, where it is automatic in the sense that I buy a house and give address and lockbox code to my team and they know what needs to be done.

My job is to see where I keep making this process better with each project.

Thanks,

Sharad