Advice for successfully investing out of state

[AJ Wong]

I'm a real estate broker that mostly provides services to absentee clients, (so I might be biased) but I'm also experienced when investing and developing real estate out of state. 

In fact, I'd argue as a result of me being to establish a healthy real estate business in a state and territory far away from where I grew up or began my RE career, that I'm uniquely qualified to provide insight into the essential elements of successfully investing out of state. 

I, like many, ventured a good distance to purchase my first property. 1000 miles away from LA to be exact, in a much smaller town, and one of the most western in the continental US, Port Orford, Oregon. 

At the time (2018) I realized if I continued paying $4400/monthly rent it would be a long time before my income went to acquiring assets, so on my very first visit to Oregon, ever, I bought a house. Then I bought a truck, trailer, tools and eventually created my first BNB walking distance to the beach. 

Five personal properties and dozens of sales later, I have stubbornly, learned a thing or two when it comes to investing out of state...at present I'm actually developing my first international BNB just 45 mins south of San Diego in North Baja Mexico.

- Have a gameplan - Looking out of state will take you far and wide, know what you're looking for. Do you want to be in a developing area or vacation town, do you want a mountain or a riverfront cabin, turn key, or are you ready to put in work? Mine was simple..affordable and walking distance to the beach. 

-Use technology - There are so many incredible tools that can help investors determine areas of focus and analyze properties for purchase. Beyond Zillow, Realtor.com and Bigger Pockets, there are incredible rental assessment and cost assessment tools, seemingly by the day that can help one get educated on a new location. Unbiasedly BP has been one of the top resources. I've met my top go to investors, several quality colleagues and some of my favorite and most efficient clients in just the year I've been active. We often utilize FaceTime, texting and video for initial tours and analysis, and often negotiate executed transactions prior to the buyers initial visit in markets that are very active. Oregon is unique in it has a standard ten businesses day contingency period that buyers typically visit the property for at least an initial or secondary visit. With that said read below..

- Budget for time and transportation. Even if your broker is as great (as I am) you will need to commit to your search and monetization. Be prepared to pound the pavement. Look at as many properties and areas as necessary until you have your bearings. You never know what a showing that doesn't initially have a lot of promise ends up leading too. Maybe the neighbor is selling in two months, or the listing broker has another property coming to market. Energy creates energy. Opportunity knocks but it doesn't find you.

- Get a really, really, really, great broker. - When I first purchased my home it was from the top local broker, we still work together today. She provided me all the insight I needed to a market I was unfamiliar with and help me feel reassured on the process. What constitutes a great broker? For me it's someone I relate to, has good experience and reviews and treats me the way I want to be treated. I like to be told the truth. I went a step further and employed an attorney to review my purchase contract and coordinate the closing. This was probably overkill but one thing real estate licensure has taught me is that no amount of our diligence is too much. My clients find me through word of mouth, Bigger Pockets or Social Media. Those are good places to find a great broker :) 

- If it's the first..buy something you would use or of obvious value. If it's a second home, vacation rental or holiday property, I would recommend buying something you would personally utilize. If you can afford any of the above, you can afford the time, energy and love it will take to make it a home. Buy or make it into something worth while. There are no short cuts. Yes you can purchase a 'turn key' property that might not need much improvement but it still takes some effort and energy to create a comfortable and inviting space. For me that meant two years of remodeling to the studs with zero experience. But it gave me the experience. And it taught me no matter what, people will pay for something well cared for. In any market, great properties rent, sell and retain their value. Making a home often takes time. Not just actual investment but often years to bring the property to its full potential. Quality sells itself. Obvious value means a coastal six plex of detached homes for $650k with 25% down at 5.75% A client from eastern Oregon bought that with me in February. They might not actually ever consider living in one unit, but they are remodeling and furnishing several in their style. 

- Lastly I'd say do it somewhere you actually like, or better yet, love. If you live in California or Seattle there aren't many affordable places to purchase on the Pacific Coast, but there are lots of beautiful and investable areas within range. It will certainly make it more inviting when you have to go there, and you will...Even if it's not Oregon, there are accessible areas that provide value. Owning property in another area only adds color to your story and if you're properly  prepared, can mitigate some of the stress from owning and operating a property remotely, it's a worthwhile consideration.

I have friends from LA that in the past four years have purchased properties from Texas to Nashville and are in the process of relocating to the latter permanently. They've taken some risks, scored some great deals and created a portfolio they might not otherwise been able to acquire as efficiently. 

I have another friend that has purchased several properties in Cleveland OH recently. He's gone several times. His investments are profitable. 

Perhaps the next article I'll post in regards to successful investing will focus on imagination.