Tips on purchasing out-of-state NON-turnkey properties

[Matthew Terui]

I currently live in Hawaii, but I used to live in Northern Indiana. A deal popped up back in IN. It's a package of 4 houses (8 units total) for $200k, cash-flowing $30k+/year!

What kind of advice can I get from the BP community on purchasing an out-of-state property. It's not a turnkey situation. So I would need to do as much due diligence as possible from a distance. Should I stay away from this? Anyone have a good experience in this type of situation?

So far I have received a 2016 P & L statement from the current property manager.

[Ross Denman]

Most of the investors that I work with in Indianapolis use a core team like this:

1. Property Manager
2. Investor Friendly Real Estate Broker
3. Home Inspector
4. General Contractor

This will help you get various perspectives on the property (as long as they are not all part of the same outfit.) One of the realtors that I usually refer my clients to will physically visit an interesting property and take plenty of photos and video. They will run various comparable reports as well. Then the investors will usually hit me up for my perspective as well to evaluate the rental market, tenant demographic, and an overview of the types of issues in those neighborhoods or age of home (roofs, mechanicals, and sewer lines mostly.) I also dig up some history on the permits, enforcement, and board of health databases to get some ideas on the property and immediate area. We usually do this all in the same day or two. Speed is essential in today's market.

After the offer is submitted and a home inspection is scheduled, inspector, realtor, and myself will usually meet at the property for a more thorough walk through. I can usually give them an idea on the budget based on the walkthrough and inspection. If it's moderately to highly distressed then we will usually get a GC to give us a better idea on budget though. At that point we finish negotiations and start moving forward with whatever the game plan is.