BiggerPockets

I tend to feed on positive people around me and I have seen a few posts claiming that out of area or out of state investors are not going to be successful.
So I am curious to know who on here is not only an out of state investor like me ( I live in northern cali, where cash flow is not good), and who are successful doing it, especially buy and hold investors. I 'd also like to know where you are from, where you invest and you general plan and profits, details, details.
I have also seen people claiming that paying ppty managers is a risky and takes too much of the profit.
Let me disagree on that, I do believe that even if my properties where a mile away from where i live, I think that managing your own property is inherently bound to fail if your goal is to retire on real estate.
Self managing is very limiting as far as the number of ppties one can acquire and puts a limit on success. As an extrem example, Donald Trumps would never be a billionaire if he self managed his properties.
I believe that delegating properly is what makes one successful.
Plus the 7% management fee I pay allows me less stress, and I would never be able to be as professional as my ppty manager.
Doing it myself I ll go crazy after 2 or 3 ppties. Having a ppty manager, I can sleep good and have 50 ppties or more.

I am one of the successful out of state investors here on BP. I live in Colorado and just this year purchased property in Texas, Oklahoma and Arizona. I also have property in California, Virginia and Colorado. My philosophy on Real Estate Investing is just like stock investing. I don't visit a factory or an office of a stock I buy, so why should I visit a property I buy? Even if I owned 51% of a company's stock, I let the professionals run it. I am sure Warren Buffet doesn't visit a Coca Cola plant even though he has billions invested in Coca Cola.

I pay from 6% to 8% for property management and that is more than worth it. I manage the PM companies and they manage the properties. This gives me more time to do what I want to do. If you manage your own properties, it is like a 'ball and chain.' How do you ever go on vacation? You pay someone else to be 'on call' if a problem arises? If so, just have a property manager. My strength is accounting, not fixing a toilet.

Currently, my gross numbers are $30,000 a month gross rental income. About $10,000 in debt service, $2,000 in property management, $1,500 in property taxes, about $500 in insurance. Repairs and utilities can vary. Number of rental units is 30. Dollar amounts are rounded.

Obviously, management (good management that is) is important and not easy to find, it requires some trial and error when venturing into a new area.

That said, the real key is buying right. If you do, you can cash flow, if you don't look out.

Many of the successful out of state investors (I have and still own out of state) are successful because they understand the financials associated with the property and know how to hire and manage a good team on the ground floor.

Some will argue that PM is an overpaid job, something you should do yourself, however, I disagree when it comes to owning out of state. Very difficult to self-manage from afar!

Mike,

I wish I could put eyes on as well, but that just not going to happen from where I am overseas. I am sure I'll get burned a few times but I plan to minimize it by insisting on a due diligence period and paying for a home inspector. Cheaper than a flight.

By the Way, I just put my first offer in today on a property in Atlanta based solely on pics from the MLS. I guess we'll see soon how well true long distance investing works out for me.

Michael,

You are on the right track. I think a property manager is absolutely the way to go whether your rental is next door, or 2000 miles away. I have a few rental properties that are local, but I have property managers managing the properties. Could I do this work? Absolutely, but I know the time spent managing the properties is time spent away from creating more deals which is much more profitable.

After closing on 12/31, I will own 23 rental units in South Dakota. I live in Oregon. The reason I chose to invest there is because Portland is very poor for cash flow, and also because my father in law is kind of a fly-by-night handyman. My husband and I have no desire to self-manage so it was a win-win.

14 units are managed by my father in law plus myself, to the extent I can from afar. We pay him 5%. 9 units are managed professionally and we pay 8%, which is a much better deal than what we have going with my FIL. It's worth the extra 3% to be totally hands off.

After Friday, monthly revenues will be ~ $14.5K on the 23 units. Debt service around $5.5K

I'm generally pretty happy how things are going. Not much I would change. We fly back once per year to check on things and that helps keep the team in check.

I have about 80 properties and 250 Lessees. I am not an out of state investor, but I have many properties in state, that I have never seen. Probably 20% that I have never seen.
I have had many that I purchased, operated and sold and still never saw them.

Then again, I have many sgl fam houses that i personally mowed the yards last Summer after work.

PM works great for me on the properties that I can't easily handle myself. 5% for tenants that require maintenance is a great deal. I wouldn't even consider multi fam w/o PM. But NNN commercial tenants are a breeze via phone.

My biggest problem with out of state properties is banking them. My lenders rarely consider loaning me money on an out of state property. Moreover, I am less and less confident in my ability to fully assess the property the farther away it is, e.g. the neighborhood, growth trends, comps, etc.

Annual revenues 1.1M, debt 850K.

Any tips on how to find a "good property management company"

Happy New Year all,

How are you out of state investors finding your deals/properties?

Doug

Hello to all! I am a wholesaler and I specialize in out of state investing. I primarily work the Birmingham, AL and Jackson, MS areas. (Michael Seutin), I apologize that you have had bad experiences with out of state wholesalers. My partner and I work hard to ensure that investors are happy with our wholesaling services. We work with great property management companies, contractors and home inspectors. We only market great deals. Our inventory consists of light fixers needing no more than 10-15k in repairs. Please feel free to contact me regarding these investment properties. The rental market is hot due to the recent disasters in the south. I can be reached at 818 800 3992.