I've received this question from 3 investors in the past week so I'd like to just put my 2 cents out there for what works in my current market. A little bit of background, I own and manage several hundred doors in the Metro Detroit area and have been active in the investing community since 2003. I've seen the ups and downs and ups again, but I'm far from all knowing.

The general question is "How do we invest remotely from out of state in the Metro Detroit area and get to scale quickly?". This breaks down to a couple of basic issues with buying property remotely.

1. Can you assess rehab costs without being onsite?

2. How can you find enough deals to hit critical mass?

3. How do you keep the management straightened out to execute your cash out strategy?

1. Can you realistically assess the rehab costs without being onsite? You can search another one of my posts to give you a sense of generic rehab and maintenance costs, in the end this is the key variable in your underwriting that needs to get nailed down. So how do you do it? The first way is build a team large enough to do it all in house, now you have a crew lead who can go estimate time and materials to get jobs done. This helps keep your funnel full without dealing with contractors. BUT... this also means you need to put a plan together to keep 4-6 full time guys busy. For this you may be looking at buying 15-25 houses every 6 months. You need to buy in cash and you need to rehab in cash and then quickly move to recycle your money. Bottom line, this type of activity will cost 3-6k a week in labor, and materials are above that. It is not cheap so you must have volume to keep the guys busy or else they will leave you. You can do the math, but assuming it takes 6 months to get your money back you will be floating these types of purchases with cash or hard money loans. It is being done today by a number of investors and this is the number one way to scale. Think of it as building your own construction company, daunting, but it is being done today.

Okay, if you don't have $1,000,000 to drop in the Detroit market and build your own construction team, now what? It is still possible, the next best thing is to get vetted deals through property managers. These may end up being 1.3% rental deals instead of 1.5-1.7% but they can still be great adds to your portfolio. The real value here is the rehab costs, if any, are absolutely known. In most cases these deals are just churn as investors come and go from the market. Many don't even trade on the MLS because if you have to do $10-15k in repairs the market just isn't there. The MLS is for turn key properties that can get financed conventionally.

One way to fail is to rely on a real estate agent to give you a definitive answer on rehab costs. You should view what they tell you as guidance only. No offense to all the great agents out there but unless someone is willing to sign up to get the work done at a certain price then anything they say should be critically examined.

2. How do you find enough deals to hit critical mass? Assuming you aren't doing this full time from your yacht sitting off of the US Virgin Islands you will be busy during the day living your actual life. This means you will need to rely on wholesalers, Property Managers, Investor Specific Real Estate Agents. You can find those here on BP, or in FB groups. Again, if you have deep pockets you can just buy a portfolio. This works best for those with a local construction presence. For the rest of the investors I strongly advise setting up 15 to look at and getting on a plane and flying in for 2-3 days to see them all. Then, after one or two trips into town you can use your agent to make offers on your behalf. Just don't forget to have your strategy for item 1 nailed down. Attend those virtual meetups that are available (DM me for more details on this).

3. How do you keep the management straightened out to execute your cash out strategy?

This is the easiest one. Use a professional, licensed PM. In Michigan the laws require property managers to have the same licensure as real estate brokers. If you violate this rule, especially in the city, prepare to be sitting at home wondering if your money is being stolen. Banks and lending institutions love to see the PM statements from a 3rd party company. They know there is a much lower chance of any financial shenanigans with professional management in place.

I'm certain I've forgotten a few key details here, but to sum it up, it is possible and key partnerships are the key. I know very active guys like @Travis Biziorek are doing it. Although he may have a different take on what is required to be successful.