Quote from @Caleb Benedict:
Hello BP! I am interested in fix and flipping properties in the midwest- Cleveland, Saint Louis, Columbus and Indianapolis. I've been researching markets for months, and I have created this pipeline of great wholesalers from these areas. I just came across a deal today which looks absolutely incredible. However, the problem is that I live in NYC. I want to know from those of you who are flipping out of state in the cities I mentioned (or just out of state in general). How did you assemble a team? How do you know who to trust (which is probably my biggest fear)? Is it even worth it, or even possible, to flip properties when you live a thousand miles away? I know that the general wisdom is that you should always flip near you, but if the numbers are really good and you have some wiggle room, would you do it out-of-state?
Any and all help is appreciated and I am also open to any and all advice and partnerships. Thanks again BP!
Caleb
Hello Caleb,
Diving into out-of-state fix and flip projects, especially in dynamic markets like Cleveland, Saint Louis, Columbus, and Indianapolis, is an exciting venture, albeit with its unique challenges. Living in NYC while managing projects a thousand miles away can be daunting, but with the right strategies and team, it's definitely achievable. Let's break down how you can approach this effectively.
Building Your Team
- Leverage Your Wholesaler Network: Since you've already established connections with wholesalers, ask them for recommendations for reliable contractors, real estate agents, and property managers. Wholesalers often have extensive networks in their local markets.
- Real Estate Agent: Find an agent who is experienced in working with investors, particularly those specializing in fix and flips. They can be invaluable in providing insights into the local market, helping find deals, and assisting in the resale process.
- Local Contractors: Crucial for the success of your project. Look for contractors with a proven track record and positive reviews. If possible, visit the area to meet them in person, or arrange virtual meetings to establish a rapport.
- Property Manager: Especially if you plan to hold the property for rental post-renovation, a good property manager is key.
Establishing Trust and Communication
- Referrals and Reviews: Trust is built through referrals and proven track records. Prioritize professionals who come highly recommended by other investors.
- Regular Updates and Check-ins: Set up a system for regular communication. This could be weekly video calls, progress reports, or photo updates.
- Visit the Properties: If possible, make occasional visits to the properties. This shows your team you're actively involved and also gives you a firsthand look at the progress.
- Use Technology: Leverage technology for project management and monitoring. Tools like Zoom, Dropbox, and various project management software can be very helpful.
Assessing the Feasibility
- Numbers Don't Lie: Ensure your numbers include all costs: purchase, renovation, holding, and selling costs. Factor in a buffer for unexpected expenses, especially being remote.
- Risk Assessment: Understand the risks involved, including market fluctuations, unexpected renovation challenges, and the difficulty in managing a project remotely.
- Start Small: Consider starting with a smaller project to test the waters and understand the dynamics of long-distance flipping.
- Exit Strategies: Always have multiple exit strategies in case the flip doesn't go as planned. Can you hold and rent the property if the market turns?
Final Thoughts
- Networking: Continue to grow your network in these cities. Attend real estate investing meetups virtually or in person, join online forums, and connect with other investors.
- Education: Keep educating yourself about each market, the legalities of flipping in different states, and the latest trends in real estate investment.
Flipping properties out-of-state can be a rewarding venture if approached with diligence, thorough planning, and the right team. The key is to balance the attractive potential returns against the challenges of remote management. Your willingness to learn and adapt will be crucial to your success.
Feel free to reach out if you need more specific advice or are considering partnerships. Wishing you the best in your real estate journey!
