Have you done any out of state investing? How did you overcome your initial fears?

[Ran Iarovich]

Calling Washington Investors:

Rental and home price ratios are currently abysmal in the place we call home. Not to mention, interest rates are the highest they've been in the past 10 years. I'm curious if anyone has considered and actually went forward with out-of-state investing? If so, I want to hear your story and how it has worked out! When did you buy, where, and why? If you're comfortable, maybe give us a little glimpse into how much your cash flow is after all expenses. If you haven't, what type of fears are you facing? What is stopping you? Are you waiting for something better? 

[Travis Biziorek]

Hey Ran,

I live in CA but invest in Detroit. That said, I cheated and relocated to the Detroit Metro area for 5 years. Of that time, 2.5 years were spent AGGRESSIVELY building my real estate portfolio. I made a bunch of mistakes but it has ultimately been extremely rewarding and allowed me to move back to CA with my wife continuing as a full-time mom.

I'm still extremely active in the Detroit market, largely to my network and team. I also deal with a lot of out of state and out of country investors. Some I've bought deeply discounted deals from because they trusted the wrong folks.

Things I see people screw up...

1) Trusting the wrong people. This is hard because some people have all the right answers. The best thing you can do is talk to as many people as possible and get a feel for the different conversations. Who best aligns with your goals, what you're trying to do, etc. Who seems too salesy? Who has an online presence or reputation to uphold? 

2) Do NOT go buy the cheapest houses you can find in your target market. This is big in lower cost markets where people think they can simply go in, buy the cheapest (or close to it) house, place a section 8 tenant, and chill. They generally end up in bad areas with bad tenants.

3) Along the same lines, section 8 tenants are NOT all created equal. Don't buy something with a super high voucher amount, especially if they are touting it. Usually these folks have been screened by voucher amount and not at all by actual tenant quality.

4) People spend too much time trying to "build a team". I was at fault of this myself initially. I look back at me as a rookie and I have to laugh. I wasted a bunch of time doing this. It wasn't until I actually started DOING things that I found my team. 

As far as how this has worked out for me. I have 12-doors in Detroit that produce over $16,500/mo in gross rents. After ALL expenses (including holdbacks for reserves) my net cash flow is more than half of that. 

I took my foot off the gas a bit to pay down some debt (mostly HELOC) and execute our move back to CA but I'm starting to add to my portfolio again now.