All Forum Posts by: Jerry Poon

@Jerry Poon 

  its not Memphis specific its out of state investing in any of the so called cash flow market I don't care where it is these occurances happen all the time... the cheaper the homes the more the less than honorable folks come in buy them and flip them to the uninitiated..

there was a post yesterday about the 900 dollar house an investor bought in Detroit he was very proud of it... Well bad TK buys will buy those and resell them for 25 to 40k to folk that don't know any better.. The person who bought it if it works our great if not he is not out much and can walk away..

The person In Memphis I mentioned just happened to invest there. but as I stated it could be Atlanta it could be Philly it could be any city in these price ranges.. because that is what every one buys to hit the so called 1% or 2% rules.. and they are dominated by lifelong renters and all the issues that go along with it..

@Jerry Poon

has anyone been intentionally screwed by buying out of state.. does a bear sh in the woods heck yes... its all to common.. Investing out of state is super risky for those that do not know what they are doing and or have limited capital..

The thing is people in CA and in other countries think what the heck its cheap lets give it a go only to find out its very difficult and extremely risky. those that are telling you here on BP that it is not have another agenda they sell out of state properties and only talk it up ..

I wrote an E book for Aussies on how to invest in the US as they were getting hosed left and right by US marketing companies and less than honorable TK operators.. It is appropriate for CA investors as well.

I personally foreclosed on more than 200 LA based investors that had no clue as to what they were doing got talked into buying out of state by LA based marketing companies that neither owned the asset or were licensed to sell the asset.. IT was a night mare I would never do it again..

I have just finished trying to help one LA investor that bought 3 homes in Memphis a few years back.. One is boarded up has not been rented in 2 years. the other they tried to sell on contract but the buyer put a tenant in is collecting rent and not paying on the contract and the other one the tenant just left and its 5k to rehab yet again and they are with the best management company in the market..

so if your bound and determined to go out of state

1. find a market you like and make contacts with the locals there

2. do not buy through LA based marketing companies what do they bring to the table they have never even seen the house your going to buy they are only loyal and talk up those that pay them.

3. use the same common sense if you were buying a home in LA find a reputable agent get MLS listing do not trust ARV values from promoters those are blue sky.

4. get an independent home inspection just like if your were buying a home to live in.. do this before you close and make sure you know what your getting and ask for items that are problems to be fixed prior to closing.

5. buy at the top of the market not the cheapest those will have problem tenants and its very likely you could lose all your money on super low end.

Lastly if you are dealing with out of state TK go direct no need to pay outside selling agents its just tacked on to what your paying for the house. houses out of state are just not sold like they are on the West coast think about it why are these companies trying to sell homes 2k miles away from them... Because they know CA buyers will over pay and they could never get the same locally the locals just won't pay that amount the locals will buy the trashed houses rehab them themselves and rent them..

Caveat Emptor

@Jerry Poon timely post!

It is something that I believe is very difficult to find. Having trusted "boots on the ground" is something that is rare to find, but is possible.

Having spent some time in California myself, I can't imagine how people start investing out there.

I'm lucky to live in Michigan, because that is where I invest, and don't have to find boots on the ground.

With that being said, I'm interested to hear what everyone else has to say about this. 

What would be the most important thing you are looking for?

I live in SoCal as well and have only bought out-of-state. I've never been screwed just because of the distance (screwed in other ways, but distance was irrelevant). I'm sure there are horror stories out there, but it all comes down to doing due diligence. I've also never hit a problem so far that I couldn't handle over the phone.

As far as finding the teams, you'd first want to pick a market to focus on so you know where to start looking. Then a lot of it can be done even here on BP by just asking other investors who they use. Referrals are really the best way to do it, just because if another investor recommends someone, they at least have a positive track record for someone so they are more likely to be able to help you as well.

Hey @Jerry Poon 

Welcome to BP! Local in SoCal is tough as property values are high and cap rates are low. If you have a large chunk of money for a down payment then it may be feasible to go local. I would stress to build your team first!

good luck!

Vala