New investor fear: rentals?

[Victor Sarkisyan]

Hi Everyone!

New "investor" trying to get my first property to BRRRR. I've been listening to the podcasts, read Brandon's and David's book, trying to invest out of state, and I'm stuck in a place where I havent read too much about. Maybe it's part of analysis paralysis, or trying to find that unicorn deal, or fomo, I'm not sure what category it calls under, but here it is. I'm researching these markets, and start thinking about the following:

1. why is property still on trulia/zillow? It looks decent enough and would make good cash flow. Great neighborhood, good comps in the area. What gives?
2. why are there so many houses here for sale or for rent? Or so little? Are these quantities even accurate? Does that mean it's a market I should or shouldn't even bother?
3. this property looks great to buy, the numbers make sense, but is someone going to rent it? Why is this other house here - with a very competitive, if not cheaper - price, still not able to find a tenant after 4 months?

Do I ask my realtor for the market data because I'm out of state? That's what I hear others doing (of course do your own homework too). Still, when you're trying to find a right market and it takes a week to try and figure out from afar, it's hard to know what's right and wrong. Thanks for reading, I'm hoping to get some insight from people who have been in my shoes before (which I'm certain is all of you haha). Thanks again.

[James Wise]

Originally posted by @Victor Sarkisyan:

Hi Everyone!

New "investor" trying to get my first property to BRRRR. I've been listening to the podcasts, read Brandon's and David's book, trying to invest out of state, and I'm stuck in a place where I havent read too much about. Maybe it's part of analysis paralysis, or trying to find that unicorn deal, or fomo, I'm not sure what category it calls under, but here it is. I'm researching these markets, and start thinking about the following:

1. why is property still on trulia/zillow? It looks decent enough and would make good cash flow. Great neighborhood, good comps in the area. What gives?
2. why are there so many houses here for sale or for rent? Or so little? Are these quantities even accurate? Does that mean it's a market I should or shouldn't even bother?
3. this property looks great to buy, the numbers make sense, but is someone going to rent it? Why is this other house here - with a very competitive, if not cheaper - price, still not able to find a tenant after 4 months?

Do I ask my realtor for the market data because I'm out of state? That's what I hear others doing (of course do your own homework too). Still, when you're trying to find a right market and it takes a week to try and figure out from afar, it's hard to know what's right and wrong. Thanks for reading, I'm hoping to get some insight from people who have been in my shoes before (which I'm certain is all of you haha). Thanks again.

 Dawg, you've got yourself a serious case of analysis paralysis. There will always be doubts & unkowns. What you gotta wrap your head around is that nobody gets rich without taking action & an appropriate amount of risk.  It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.

• Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
• Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
• Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
• Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
• Make sure your property manager is a licensed real estate brokerage.
• Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.

P.S.

What's the worse that could happen? It's not like the tenants will set cars on fire.

Or destroy the bathroom.

Or the kitchen.

Or the yard.

Or light fireworks off in the bathtub.

Or possess unregistered firearms.

Lol oh wait, they are going to do all of those thing & much much more! 

It's all good though. Now you've been exposed & seen exactly what's in store for you. I can tell you that getting through everything you've seen above was no big deal & this business has & continues to create a ton of wealth for me & millions of other investors from all over the world despite what you've just looked at....Remember, they aren't making anymore land!