Advice/Inspiration Out-of-State Investing (NJ resident)

[Matthew McCormick]

Hi BP Community:

I am trying to gather inspiration, ideas, and advice regarding out-of-state investment properties, and what you would do if you were in our situation.

Currently I along with my father, manage a few units in NJ (nothing big, we’re talking 5 or less). We just sold a multifamily here in Newark, NJ, and have a nice profit to transfer towards our next purchase. We feel comfortable with using around $100,000 towards expanding our portfolio or at least trying a new method. Our market is extremely expensive even with the funds the house provided. Additionally, the location/state/laws are not at all landlord friendly (but I’m sure most of you know that!).

So, if you had a good starter amount to spend on an out-of-state investment property:

• Where would you look?
• What details would be most important to you? 
• How would you get in touch with local lenders? We are considering hard money lenders if it’s the right fit, although we’ve never gone that route before.

If the conventional rule is 25% down for investment/non-owner-occupied multi families, then we'd probably cap our search at $450,000 ($112,500 down) but preferably less. 

I should also mention, the way our scenario works is my father purchases the properties solely in his name and I handle the day-to-day operation. Everything from tenant repair requests, contractor dealings, realtor involvement, attorneys, tax preparation for the accountant, screening tenants, preparing leases - I handle. We’ve been doing this since 2018 and it’s been a phenomenal albeit stressful experience! I definitely love it, and believe I have a strong foundation to manage properties with the right contacts (which is why I think Out-of-state is the way to go)!

I really appreciate any thoughts/ stories/ tips at all. We’re brainstorming at the moment. The house was sold last week!

Thanks all,

Matt