All Forum Posts by: Amit Patel

I am closing on my first property soon! It's a SFH 3/1 with a detached mother in-law suite 1/1. The units are currently rented separately and with a rent increase on the back unit, it is a great deal. However one hiccup my insurance broker dropped on me is that he cannot find any insurance company to insure the detached unit as technically is an "other unit" like a shed or garage. So the most I can get is like 10% of the coverage for the front unit.

I feel that this set up is an extremely common and I am surprised insures won't fully cover the detached unit.

How big a deal is this? Should I get another brokers opinion? Thanks!

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I'm in the same boat as you. I'm looking for "rent ready" SFH, and getting a decent cash flow has been challenging. I am looking out of state, so I can't realistically take on a whole rehab from 500 miles away. If you want $500 in cash flow, I think the only way to do it is to buy very well.

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Also a physician here, why would you want to manage your rental properties? Best way to go is just to fork over the extra 10% per month and get a property manager. You would just have to find the deal. Flipping a house will be too time consuming if you are working as a full time physician.

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Originally posted by @Christian Rojmar:

Are there any areas closer to where you live (within a couple of hours driving) that you could look at first. Makes it easier for you to drive out meet with contractors, review rehab work, etc.

If not, do you have anyone in the particular area you want to invest in that you can trust (boots on the ground)? If not, it is certainly tough and risky. I have built a great relationship with a property manager in a new area whom have agreed to go out and do "surprise" visits, take videos, and tell me how the process is coming along. I will also use my realtor as a second source. The third source will be my wife's brother who lives in the area and is in the flooring industry so understand rehabs etc. By having multiple people I can trust on the ground to review the rehab work, I feel confident that I do not have to go out there during long periods of times and make sure everything is going smoothly. Also make sure you vet the contractors carefully and pay as little upfront as possible - i.e. pay for material of the project and then pay once the particular project is completed and you have had a trusted person(s) review and ok the work. That way you have some leverage. You may also want to put into contract that if the rehab is completed x number of days before expected deadline, contractor will receive a 5% bonus and if it is completed x number of days after deadline, a 5% reduction will occur weekly or something along those lines to make sure they are accountable.

I would suggest that you read the book "Long Distance Real Estate Investing" by David Greene if you really want to invest out-of-state. He provides a lot of great ideas for how to reduce the risk of investing out-of-state.

Good luck!

Thank you for the reply Christian. Those are some good thoughts. I don't know where I want to invest yet but it will most likely be out of state, so I don't know if I will have anybody I trust on the ground. However I was thinking, if I focus more on homes without need of extensive rehab - like only needs a fresh coat of paint, minor bathroom work, I can manage it myself over a weekend or a regular work week. But I agree it would make me very nervous to oversee a huge rehab project if I am not physically there.

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Hello all, Sorry if this has been asked before.

I'm currently in the gaining knowledge phase of real estate investing and one aspect has me concerned. I'm liking the BRRRR strategy but the key to success is to buy under valued properties which require rehab, in order to gain some "sweat equity" after the rehab. However my local market isn't very good, so I am considering out of state markets. So if I were to find a great property 1000 miles away that needs new floors, paint, bathroom etc. How I am suppose to oversee the rehab? I would need to take weeks off of work to schedule meetings with contractors to get quotes and then set aside time at a later date for the work to be done. I can't possible take off that much work. Is this is an area where a property manager can step in and oversee the rehab without the buyer (me) being present? Thanks!!

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All Forum Posts by: Amit Patel

Amit Patel has started 2 posts and replied 5 times.

Post: Having trouble finding insurance on detached unit

Post: Questions about Analyizing Potential Rentals

Post: Getting started in rental home investing

Post: Long distance rehab question!

Post: Long distance rehab question!