Finding good deals out of state with good CoC

[Varun Sharma]

Hi,

I'm an investor, residing in New York. In the past, I've done some out of state purchases [Memphis/Little Rock] through turnkey companies. Overall, I had a decent experience throughout the process as it generated good passive income and my involvement was minimal.

However, now that I have more time at my hand, I am interested in making the process and my investments more optimal in terms of cash flow. I'm not optimizing for appreciation at the moment (though it is a nice to have). Specifically, I'm thinking about getting properties which ideally satisfy the 2% rule or at least are significantly above the 1% rule (ratio of monthly rent to purchase price + renovation cost).

Given these goals and the fact that my constraints, I have the following questions:

a) Which markets are best to look at ?

b) How do i get started (like find properties that fit my criteria/constraints and then vet them, given I will likely be out of state) ?

c) If I do find a property that is in need of repairs, how do I go about the renovation process (given that I won't be onsite or close) ?

Thanks
Varun

[Jake Forehand]

Quote from @Varun Sharma:

Hi,

I'm an investor, residing in New York. In the past, I've done some out of state purchases [Memphis/Little Rock] through turnkey companies. Overall, I had a decent experience throughout the process as it generated good passive income and my involvement was minimal.

However, now that I have more time at my hand, I am interested in making the process and my investments more optimal in terms of cash flow. I'm not optimizing for appreciation at the moment (though it is a nice to have). Specifically, I'm thinking about getting properties which ideally satisfy the 2% rule or at least are significantly above the 1% rule (ratio of monthly rent to purchase price + renovation cost).

Given these goals and the fact that my constraints, I have the following questions:

a) Which markets are best to look at ?

b) How do i get started (like find properties that fit my criteria/constraints and then vet them, given I will likely be out of state) ?

c) If I do find a property that is in need of repairs, how do I go about the renovation process (given that I won't be onsite or close) ?

Thanks
Varun

I'm unfamiliar with the Memphis/Little Rock markets, but why don't you want to continue investing in those areas? Since you bought a few turnkey properties, maybe you have a decent network of contractors, handymen, or PMs already in place. Figure out ways to source off-market deals that are closer to meeting the criteria you are looking for (The higher your standards, the more difficult it will be, but that's the point of good deals). It could be through wholesalers, agents, networking with sellers yourself, etc. Each time you move to a new location you are going to be starting from scratch, and it's going to be incredibly difficult to rehab a property in a brand new location out of state with no team in place. You'll need leverage and you may already have it.