Quote from @Jonathan Greene:
I think will find that out-of-state will be much more operationally challenged than local. Even if you have a good framework, it's much harder to manage virtually and stay on track. It certainly helps that you've done it, but I would maybe do one that is still in CA, but far so you can't go every day and see how that is and then inch out.
On finding an agent, definitely not the way to go in terms of calling brokerages and asking for their top producing agent. The top producing agent wants nothing to do with a new out-of-state investor, they are local specialists who don't need extra business or time suck. You need boots on the ground to see who lists flips and who lists dumps. That is who you want.
The best contractors will never, ever be on Yelp. They don't care about Yelp or the internet. That is for larger companies or for disgruntled clients or relatives looking to help.
Per diems only work in theory. If you give contractors a prize for finishing early on time, they will finish then to get the prize, but there is plenty that can be left undone without you knowing that will harm you later. Things like these only sound good, they don't work.
Again, the top producer would never go by your flip, ever, in a million years. You want a hustler, not a top performer, if you want check-ins.
I appreciate the candor and would definitely agree that my framework is all in theory until I can get a proof of concept for these out of state deals.
I like your idea of pushing my boundaries in CA. I'm living in the Los Angeles area and have my projects here. I can definitely see how going 100 miles south towards San Diego can give me greater perspective into out of state flips.
I can agree to disagree that the best contractors are not found on yelp. I work closely with one here in CA where I found him working on my investment property's neighbor's house. This contractor has 0 reviews on yelp which I found a bit sketchy, but was able to vet him by his contractor's license, worker's comp, and by visiting some of his ongoing projects. However, while I was still getting contractor bids for different projects, I found 3 different companies that are quick (based off of their contracts and guarantees) and have good quality of work (based off of previous and current investor feedback) but come at the cost of price. These larger construction companies are able to do up to 25 projects at a time and even have in-house project managers. I can see why they price their projects accordingly because their system is designed to help relieve the construction management from the investor. However, it's fair to question the integrity of the management since it's in-house. Also, in regards to a per diem, I'd like to be a bit more optimistic that I can establish the right checks and balances to ensure that the contractor is not skipping corners. I'm sure there are many more experiences where the contractor hasn't fulfilled their scope of work and gotten away with rushing the project to meet the deadline, And, I don't want to be as naive to say that I'm that 1% who can have complete quality/operational control, but I'm confident I can establish a system and hire independent inspectors to review the contractor's work.
On finding an agent, you make a completely valid point about the top producing agents. The promise for the prospective agent to represent every flip from the buy side to the sell side is only as valid as the agent's due diligence and work ethic, and trust would need to be built in the process. With that said, how would you recommend I find a hungry, boots on the ground agent? The greatest and probably only leverage I have as an out of state investor is the proof of funds to show I have the liquidity and the risk tolerance to average 2-3 deals per month.
