New Orange County Real Estate Investors

[Garrett M.]

Hi BP community,

My business partner and I are new real estate investors located in Orange County, California, and we are very excited to introduce ourselves to the BP community.

Let me start with introductions. My name is Garrett, and I am an attorney with a national law firm here in Orange County. My business partner, Mark, has a Ph.D. in physical chemistry and develops materials for next-generation satellites.

Our goal is to build long-term wealth by properly assessing, purchasing, and renting single- and multi-family housing that appeals to professionals, families, and students. We have adopted the “buy and hold” strategy of real estate investing. For our first few purchases, we are particularly interested in two markets: (1) Central California, with an emphasis on the Fresno/Clovis area; and (2) out-of-state turnkey investing, particularly in Tennessee and/or Texas. For those first few purchases, we want to be particularly cautious and slow to execute, while enjoying the learning experience and developing our partnership. Soon thereafter, though, we would like to grow rapidly and acquire apartments and commercial property, both here in California and out of state.

While we feel sufficiently prepared to make our first investment, we are still soaking up the knowledge generously provided by this community and through local REI clubs. We are greatly appreciative of the time you all put in to educate newcomers like us.

We meet, on a near daily basis, with local investors, attorneys, brokers/agents, mortgage officers, and other professionals. We would be more than happy to meet with those of you local to Orange County that are interested in collaborating. We are particularly interested in meeting with local investors who have long-term experience in out-of-state turnkey investing and those with multi-family and apartment experience.

We look forward to connecting and working with you as we begin our journey. Thank you in advance for your comments and well wishes.

[David Thompson]

Folks, all things being equal, I don't think many people would argue the fact that investing locally would make more sense because you can drive to your property.  However, I see time and time again folks over reacting and throwing the baby out w/the bath water on out of state investing.  I see more advantages than disadvantages of diversifying real property out side of one's area.  

Are there fantastic property managers outside of your state?...ha....yes. Are there markets performing better....yes. Are there locations that provide better value....yes. Are there investing methods that probably work better than others for out of state investors?.....yes. That would more likely be new or very new SFR or small MF rentals in great markets where you could get referrals from BP members on the area, property manager recommendations, etc. Syndications, where you can go on BP as well and see if folks have had experience w/certain operators, review track records, etc They have experience, do all the work and you sit back and get a quarterly check. However, as I've mentioned before, you can be as intentional as you like and learn from these operators how they run these businesses. That's all very doable.

I have a contact for instance that runs turnkey operations for new homes in TX, essentially primarily deals w/out of state and intl investors. I have purchased some small MF from him in the past. I like the product, he builds in good areas where there is demand, the product is built for investors w/solid ROI numbers and he recommends property managers but you can go w/the one you find recommended by others. For me, its in state turnkey. Very little do I worry about.

My thoughts are:  anything good or bad that can happen to you can happen in CA, TX or any other state.  But you can minimize your worries quite a bit by the following:

1) Find properties that are new or very new buy n holds - a lot of headaches and hassles are due to R&M issues; or use syndication if you qualify where the experts do all the work.

2) Your due diligence is needed for in or out of state investment, you just minimize it greatly on out of state by avoiding fix n flips, buying old properties that require a ton of maintenance, trying to put a team together where you don't know any of the partners or doing anything much active from afar.

3) Educate yourself but you don't have to be an expert in sydication to invest in sydication nor do you need to be an expert in everything if you have a referred and solid real estate agent and property manager in another state.

4) Spend some money and go there - do some research and see where population and jobs are moving to.  Start there.  Then contact BP members who live there.  Start your research, ask for referrals.  Get on a plane and take a 3-day weekend or a week if possible and have meetings setup in advance w/several turkey operators, real estate agents, property managers.  Stay w/newer properties in solid areas (good schools) where path of progress is happening and I'm sure you will do fine.