How I was able to buy my first out of state property

[Justin Larese]

Investment Info:

Single-family residence private money loan investment.

Purchase price: $55,000
Cash invested: $5,000
Sale price: $68,000

Used an equity loan from another property to purchase this one. Being out of state purchasing with a conventional loan would not be approved because there was a lack of income history for 2 months within state. Was able to live in this new property for free since my first home's rent was enough to cover the original mortgage plus the equity loan taken out. Was able to force equity and save money for two years before selling property to reinvest funds. This property allowed me to be an out of state Landlord, use a creative way to purchase home, sharpened my forced equity skills, and learn a different state's real estate market.

What made you interested in investing in this type of deal?

Was looking to move for work and try out a different area but did not want to pay rent.

How did you find this deal and how did you negotiate it?

Had my real estate agent perform a video walk through for me since I was out of state and could not physically be there. Allowed me to see properties at my leisure from my phone. The cash from equity made for a quick closing.

How did you finance this deal?

Equity loan from first primary home. Forced equity and had appraised.

How did you add value to the deal?

knocked down a wall to make larger and more functional living room, remodeled galley kitchen with laminate counter-tops and tile. Screened in back porch.

What was the outcome?

Forced equity to the home, could have made more but took a cash deal to move on quickly. Saw the potential in a property and nailed the remodel.

Lessons learned? Challenges?

Its stressful moving across the country and trying to personally manage an out of state rental without a PM. Learned the importance of having a good team to manage aspects that I cannot due to distances. Having a trusted Realtor goes a long way in real estate. Learning different state's building codes such as roof sheathing thicknesses. Learned about MS bugs. Also learning that a Mississippi tornado siren sounds similar as a shift change siren on the Virginia docks, or a curfew siren for Ohio.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Amanda Hayden, Desoto County wizard