Investing from out of state

[Phil Rosendorf]

Hey im pretty new to this, as in still researching and collecting every nugget of info befor pulling the trigger new. Currently im building capital and making myself more palatable to lenders. Im from NYC as as you know the rental income to property price can be pretty slim so I'll most likely invest exclusively out of state.

I wanted to get a really good understanding of how out of state investing went for you. Was there unexpected road blocks? How were they overcome? How was it building your team? Do you even have to be in person to buy the property(is this a state by state thing)?

I think out of state invest is ideal since you open yourself up to every market not just locally. So I better start learning!!

[Jenny Li]

Hi, I can totally relate to that. I used to live in CT, 40 mins north of NYC. CT/NY or westchester houses were out of my range. I couldn't afford it. I ended up buying my first rental in Raleigh NC out of the blue in 2008. That was my first trip to Raleigh. It was a business trip. I was surprised to see so many new constructions everywhere. Then from a coworker, I found out houses were a lot more affordable compare to CT or westchester. I called up a local real estate agent and saw a few houses. Then I had a second work trip to Raleigh again two months later. I found a house I liked, and I bought it. I had no idea what I was doing. It was scary. A few lessons learned. 1. I couldn't rent it out as high as I wished for. After two months of vacancy, I was able to rent it out with the help of my realtor. With the mortgage payment, HOA fee, home insurance, tax etc, I was paying $400 off my pocket, ie I'm losing money each month. 2. The house I bought was a small 2 bedroom house. Raleigh is not NYC, not metropolitan at all, rather, it is very family oriented. I didn't take that into consideration. For families, a 3 bedroom house is much better than 2 bedroom. So my little 2 bedroom house took a longer time to rent it out. I got lucky that my first tenant was very responsible and paid rent on time. She lived there for a few years, I never had any problems with her. I was desparate again to find renters after my first tenant moved out. My second tenant didn't pay rent on time and he didn't pay the full amount either. I had a demanding day job and I couldn't manage this tenant remotely. I ended up finding a property manager. She charged me 10% of whatever she collected. It was worth it! My suggestions to you are: 1 to find a place where the market is growing and you are comfortable with, and yet it is relatively easy for you to get there in case you have to be there for some urgent situations. I didn't have any friends or families in Raleigh. But it's somewhat accessible from CT - 9 hours from CT by car or 2 hours by air. 2. Make a trip to the city that you would like to invest in, and try to get the feel of the environment, talk to local realtors there before you make any commitment to buy. Find out how much you can rent it for, what type of renters would you attract in the area. 3. Get a property manager. I wasn't handy nor I know anything about property management. I don't want renters to call me up in the middle of the night and say that the AC is not working, bathroom water pressure is too low ... etc. It's totally worth it to get a property manager as they will do all the work for you: They find renters, draft lease, collect rent, deposit it to your bank account, take care of repairs. 4. Buy a 3 bedroom 1.5 baths if you can. I got a very good property manager and established great relationships with her. Then I bought my second rental in Raleigh again a few years later without making a trip there. I basically search for a good property online, then ask my property manager to go there to take more pictures for me, and I asked her if she was confident to rent it out. She said yes. So I bought the second house, it's a 3 bedroom this time; signed closing docs remotely. My property manager found me a tenant two weeks after I closed the house! I wanted to be as hands-free as possible since my day job is kind of hectic. So I targeted newer buildings like a few years old so I know things won't fall apart that soon. I need to build my wealth before I have money put aside to fix stuff. Hope this helps. Feel free to reach me if you want to talk more.