My first rental property deal - in Huntsville, AL

[Nav Singh]

Hi everyone,

I had posted Qs for advice 8-9 months ago, like this one: https://www.biggerpockets.com/forums/12/topics/204.... Thanks to everyone at BP for helping with advice. There's a lot of advice about investing within 20 mins of where you live. All properties within 20 mins of me (Silicon Valley) are out of reach for my budget, so I have taken some risk and gone for out-of-state investing. I wanted to share what my experience has been. It's still early days for me to give a clean yes/no verdict, but hopefully people who do out-of-state passive investing can share their experiences and we can learn from each other.

I chose Huntsville because (a) I got intro'd to a good real estate team who had actually moved from my area in CA back to their original home in Huntsville, (b) because the numbers looked good compared to 2-3 other areas I analyzed, and (c) I wanted to try non-turnkey companies.

I bought a 2-unit property in Sep 2015. It was listed for $95K, and I ultimately paid $82K. The rents from the 2 units combined should be $1,200. Both units were occupied when I bought the property, so I thought it will cash flow immediately. I ran the numbers using BP rental property calculator, and they looked good enough for me. But as soon as I bought the property, both tenants fled. In some ways, it was good because it gave me and my property mgr a chance to screen new tenants and get a security deposit. I also invested a little bit of money in the property, and now 1 unit has been rented to a new tenant for about 3 months, and the other unit is still vacant.

The upside of remote investing has been the potential returns I will get - I won't get those kind of returns in my area. But the downside has been that I don't know how aggressively my property mgr is trying to rent the property out.

Even with the cons, I'm not planning to give up on remote investing just yet. Ultimately I will diversify by investing in a couple different areas, but my next property will still most likely be in Huntsville. My goal is 50 (multi-family) units in 10 years or less.

Thanks to the tip from podcast 167 (Kevin Wood), I'm subscribing to Huntsville business journals, magazines and blogs.

Any reachout from people in Huntsville, AL is welcome. Meanwhile, I will continue to post my story. Thanks again to everyone at BP!!

Nav.