All Forum Posts by: Danny Gonzalez

Hey Hai,

That's awesome that you want to start investing out of state.  I own a PM company in Birmingham and we help a lot of OOS investors with their Section 8 properties.  Right now, we manage over 150+ units that are on the Section 8 program so we're very familiar with it.

This investment strategy definitely has it's pros and cons. Here are a few:

Pros: 
-Reliable rent paid every month

-Stable tenants that typically stay in the unit for a long time

-Purchase prices are typically lower so easier barrier to entry

Cons:
-Getting the files onboarded and processed is very tedious.  Can take up to 3 months to go from application to lease.

-There's a chance that the tenants are rough on the properties.  When they do move out, there's typically higher turnover costs.

-Typically they're older homes so maintenance is higher than the average property. 

Definitely get a title company/closing attorney involved.  They're the intermediaries for a reason... they don't record the deed until the funds and all of the documents are properly filled out.  It's worth the ~$500.

If you reach out to a local title company, they sometimes do a basic title search for $50-$100.  It's definitely worth it, especially if you're buying a property through like an auction or something similar.  I've never used beenverified.com

Hey George,

1. I've never seen a Private Lender agree to a HELOC since typically they want to be in first position. It protects their investment. That being said, the good thing about working with a Private Lender is that you get to negotiate the terms so it's possible, just not likely. Also, with it currently being a rental, the only bank that I know that currently does HELOCs on rentals is TD Bank. If you wanted to refi, going the DSCR route might be the best option.
2.  I can't speak for Kansas, but we help OOS investors build wealth and cashflow portfolios through value add real estate all the time in Birmingham AL.  We handpick properties, and guide them through the purchase, rehab, and management of the properties.  Feel free to reach out if you're interested, I'd be glad to walk you through how we can help you out.

All the best!

@Saijal Sindwani good call on hiring a PM.  The 8 to 10% is worth its weight in gold.  A few things to remember, just in case you want to expand down the road:
-Always get an inspection report prior to closing.  You want to make sure you know what you're getting into.
-The lease is the most important document between you and the tenant.  If the tenant is refusing to have you enter the property, but the lease says you're able to enter the property with a X amount of notice, you're entitled to posting the notice and entering the property.  They can't deny you from entering your own property.
-Don't let one tenant or one maintenance expense put a bad taste in your mouth.  If you do it right e.g. always carry a reserve for repairs/vacancies, hire a GOOD property manager, keep the tenant happy by doing reasonable repairs, etc, then investing OOS is a great option to build wealth.

Good luck and be sure to utilize the BP community if you need help down the road.  We all started with 1 house.  But now I'm up to 28 doors.  Keep going!

Hey Sam,

These are solid questions.  It's great to look at the different data points, but ultimately, it depends on what your goals are.  

Are you wanting cashflow?  Do you want to flip properties?  How long are you planning on holding the properties?

Getting clear on what you want will help you narrow down to cities that are potentially a great fit for what you're looking for.  Once you have a narrow list, then you can dive deep into which is the best option for you.

Do you know anyone in your network who’s already investing in real estate? Or maybe a high-income earner looking for a place to put their cash to work?

The best way to attract private money is by finding a great deal. The money part is actually the easiest—if you ask enough people, “Do you want to earn a return backed by a property with X amount of equity?” someone will say yes.

Feel free to reach out directly if you’d like to talk about the scripts, structure, and systems I’ve used to secure private lending deals.  I'll be glad to help.

This is one of the toughest decisions an investor can face.

When I’ve been in this situation, I’ve asked myself: What does my income look like outside of this investment? Can it cover the monthly shortfall? Do I have reserves for the inevitable repairs?

No amount of money is worth sacrificing your peace of mind. If this property is causing you stress and anxiety, and you’re ready to move on, selling it at a loss might be the best option. Think of it as a $30-45k lesson that will make you a better investor in the long run. Plus, the fact that you wouldn’t have to bring money to the closing table is a win—some investors have had to do that just to move on from a bad decision.

That said, if you can hold on, cover the mortgage, and keep repairs manageable, it’s likely just a matter of time before values bounce back—especially with the projected rate cuts.

Both options are valid, and there’s no right or wrong decision here. Try to take a long-term view—it usually helps remove the emotional weight and allows you to think more clearly about the problem.

I've completed over 20 BRRRRs in the Birmingham market and help out-of-state investors do the same.

The key is to work the formula backwards. Here are the variables you'll need:

• ARV (After Repair Value)
• Estimated Repairs (add a 10% contingency)
• Estimated Rent
• Purchase Price
• Estimated PITI (Principal, Interest, Taxes, and Insurance) on the refinance side

If you know these values and ensure that your all-in cost (purchase price plus repairs) is 75% or less of the ARV, and that your rent will cover PITI + vacancy + maintenance + property management, then it's a deal worth pursuing.

The BRRRR model is a fantastic way to build a portfolio and is still very feasible—even in 2024.

If you're interested in more info, feel free to shoot me a DM—we can connect, and I'd be happy to assist you.

Consider going the private money route. If you know someone who can lend you the funds, they can act as the bank, and you repay them with interest once you execute your business plan. This is how I got started, and I've flipped over 75 homes in the past few years.

That said, make sure you have reserves and are smart with your finances. If money is only going out and none is coming in, your savings can deplete very quickly.

Best of luck!