This risk is amplified the less money you have attached to the deal.

That's when it clicked for me - that cap rates are more just a measure of risk.

I’ve been involved in real estate investing for over 30 years, so if you ever have any questions or need guidance, feel free to reach out.

Even trusting a brand new GC who's licensed/"qualified" is a risk from out of state, let alone out of country.

To achieve REPS status you need to be actively involved in your rentals.  

That's one of our biggest risks it seems, however, ND is more friendly than the MN side.  

But now you have a challenge of documenting both your time AND time of everybody else involved with the property.Now, to answer your question - is it possible from out of state?

Here are five dangerous provisions to watch for in an Operating Agreement:Dangerous Provisions to Watch:Authority to incur debt without investor approvalPower to make loans to other entities/projectsAbility to cross-collateralize with other propertiesPermission to use investor capital for other venturesCommingling of funds across different projectsWhy These Are Potential Ponzi Indicators:• New investor funds could be used to pay existing investors• Project-to-project lending can mask poor performance• Cross-collateralization puts your investment at risk for others' failures• Commingling enables masking of financial problems• Lack of project segregation enables fraudulent schemesProtective Measures to Look For:Strict single-purpose entity requirementsProject-specific bank accountsDebt limitations and investor approval requirementsProhibited related-party lendingClear fund segregation requirementsProfessional Best Practice:Request bank statements showing separate accounts for each project.

We do this by risking 1%-3% capital per trade because of 10% occasional drawdown that will come with that, mind you. 

.: One of the interesting things that occurred in the legal landscape was that in 1978, California's Supreme Court ruled that due on sale clauses in mortgage documents were void "restraints on alienation" and unenforceable unless a lender could show their security was at risk.