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Updated over 8 years ago on . Most recent reply

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Sharon Anschultz
  • Canyon Country, CA
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How do you get rental properties outside of your area...

Sharon Anschultz
  • Canyon Country, CA
Posted

I live in Los Angeles.  There is just no way I can get a performing rental property in my market.  How do you invest outside of your area without getting burned.  Already tried getting a "turnkey" property which was a total disaster.

Should your first property be a SFR or is it better to go straight to Multifamily?

What are the pros and cons of multifamily versus SFR?

What is the smallest Multifamily you should purchase if you go this route?

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Andrew Michael
  • Lender
  • Frederick/ Falls Church DC, Maryland & Virginia
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Andrew Michael
  • Lender
  • Frederick/ Falls Church DC, Maryland & Virginia
Replied

@Sharon Anschultz 

All turn-key properties/ companies are not created equal.  To answer your question, I would make sure you either have boots on the ground in the market you are investing in or you use a reputable turn-key company.  There are several very good turn-key companies with proven track records to choose from.  

In terms of single family vs multi, that is up to you and your strategy. SFH can be an easy entry into investing as you only have one lease and one tenant to worry about. Not much overhead here or things to keep track of. With a multi, you will have more leases and tenants so there is more admin work and maintenance to take care of. Something to keep in mind is your risk tolerance and financial safety net. For example, if you lose your tenant in the SFR you now have 100% vacancy rate until that home is filled. Could you financially handle 2 months of no rent? Using the vacancy example with a multi, if one unit is vacant your vacancy rate is lessened as your other units are there to compensate. You will have to compare the two investments and see what makes best sense for you.

Either way when investing out of state you are going to need help managing the property.  Therefore if you do find a property and it looks like the numbers make sense I would make sure you have a strong management plan in place.  

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