Rental properties out of state

[Andy Ramdeen]

Hey everyone , my name is Andy . I live in NYC , Queens

I was looking into rental properties but I was looking at Florida properties. I was just wondering , how do you guys feel about buying a rental property in another state and having a property management company handling your day to day activities. Also how do I know if I can trust a property management company? And if anyone lives in flordia that can point me to a great management company and some good rental properties that would be great .

[Clayton Mobley]

@Andy Ramdeen If you are wanting to buy from the same company that manages the property - and I assume not be doing any rehab work since you are at a distance and don't have contacts - then you're looking at turnkey, my friend. One company does everything - finds properties, rehabs them, updates things like roofing and HVACs etc, sells to investors, finds tenants, and manages the property long-term. 

If that sounds like the type of investment you are looking for, then you should start looking into turnkey companies in Orlando if that's the market you want to invest in. Make sure they are full-service - meaning they actually do everything in-house, rather than selling you a property and then passing you off to a 3rd party management company you didn't vet. 

Turnkey is a popular investment for folks who are priced out of their own market (like NY), but you need to do the legwork to ensure you go with a quality outfit. I agree with others here who have said it's a good idea to fly out to Orlando. Once you have an idea of who you want to work with (vetted and narrowed down to one or two providers) fly out and meet them, take a look at their inventory, drive around those neighborhoods at night, etc. It's an investment in your investment that will pay off big time in peace of mind, and it's still the best way to suss out scammers and 'too good to be true' claims.

A few other tips for investing in turnkey:

• You only close after rehab and inspections, a full-service turnkey company takes on the risk of rehab. Those 'pay to play' TK/BRRRR 'hybrid' outfits are basically letting you pay to take on risk you don't need.
• They should provide an appraisal and obviously have the place inspected after rehab, but also be fine with you getting your own 3rd party inspection and appraisal. If they balk at that, walk away.
• While you won't need a lot of updates during the rehab process or after a tenant is placed unless something goes wrong, you should be able to communicate with your team and have access to all your investment docs, leases, contracts, billing activity, etc. An online portal is best, but at the very least they should send you statements and check in once a month.
• If a company won't accept traditional financing or requires cash-only investments, I'd move along. Opinions differ on this, but to me, a company that requires cash has a liquidity problem that could be indicative of issues higher up the food chain in their business model. This is also a common trait of so-called 'turnkey' scammers like Morris Invest where they give you the 'LAST PROPERTY EVER ACT NOW' run around and make you sign a contract via email without having time to vet the property. Which leads me to:
• Don't waste time with used-car salesman tactics or false-scarcity manipulations. There will always be real estate, buyers and sellers and investors and tenants. If someone tries to convince you that you need to hand over money without being able to run your own numbers or AT LEAST see photos, it's time to move on.
• I'll say it again: GO VISIT! You should be able to see the city, tour the neighborhoods they invest in, see some properties to get a feel for the quality of the rehab work, etc. These people are going to BE your investment, so make sure you gut-check your decision. Once you've done this, a successful investment can turn into a portfolio without much additional legwork, so put in the time to make sure you're going with someone who will be around for the long-haul.

Good luck!