Buying properties out of state * safely *

[Nick Alexander]

Hello all, I am new to real estate investing but invest professionally in the stock market. 

I am based in NY and realize that finding opportunities here for any potential for positive cap rates are practically non existent. I am looking outside, preferably Florida as I would like to consider moving there some day in the future. 

Besides finding a reputable property manager, what are some other things to consider when dealing with purchasing properties thousands of miles away from us (the investors). 

I am open to both residential and NNN options. I noticed one with a BK franchise that has a 15 yr term with built in increases.

I have no idea about operating a NNN property besides the fact that I would like enter the real estate field while minimizing the potential for issues since I will be quite far away for the foreseeable future. 

Thank you for reading my first post and hoping to become part of the fabric of this forum. 

[James Hamling]

Originally posted by @Nick Alexander:

Hello all, I am new to real estate investing but invest professionally in the stock market. 

I am based in NY and realize that finding opportunities here for any potential for positive cap rates are practically non existent. I am looking outside, preferably Florida as I would like to consider moving there some day in the future. 

Besides finding a reputable property manager, what are some other things to consider when dealing with purchasing properties thousands of miles away from us (the investors). 

I am open to both residential and NNN options. I noticed one with a BK franchise that has a 15 yr term with built in increases.

I have no idea about operating a NNN property besides the fact that I would like enter the real estate field while minimizing the potential for issues since I will be quite far away for the foreseeable future. 

Thank you for reading my first post and hoping to become part of the fabric of this forum. 

Might be more helpful if you viewed getting into REI in similar fashion you would consider investing in an IPO, I think you may find the vetting process's very similar in concept.

For the investing you described I would suggest looking into Midwest markets, historically they are the most stable which should aid the evaluation process. Coastal markets, especially Florida, have some fantastic explosive growth and profit potentials, and with that some significant loss potentials too. Volatility makes it more difficult to get a good market pulse when entering. 

I would not touch commercial RE at this time, not for at least 12-18 months as there is much potential volatility on the horizon, needs to work it's way through a bit more to have better clarity of forecast. 

Residential is where it's at, 2-4unit MFH is the performer of the day. Parks are cash cows although that market has gotten red hot so getting a good deal could be difficult. There is a lot of rent-back-securities going on and they are taking tranches on those so it's the new billionaires crack it seems. 

Depending on your investable capital 4-unit MFH in community configuration could be a good allocation as it allows better capitalization for supporting services (PM, Leasing, Maintenance). 

I have many out-state and international clients, the word "safely" is so perceptual based upon any 1 clients resources and goals, I don't think there is such a universal thing.

Safety is more going to come from the team you tap (PM, Agent, Consultant etc) than any certain market, wins and losses can be had anywhere and everywhere, it's the people that determine the difference.