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Long Distance Fixing and Flipping: How We Did It

by Marty Boardman on February 10, 2013 · 8 comments

  
Flips

I was shocked when I first heard the news.

Overcome with disbelief.

How could this happen?

Who could have possible seen this coming?

The popular tabloid headline (which I read on a rack at the grocery store because I would never buy or subscribe to that kind of ridiculous gossipy trash) – rocked my world.

Tom Cruise and Katie Holmes were getting a divorce.

No, I wasn’t surprised the famous couple was splitting up. What stunned me was that their marriage lasted as long as it did (6 years). That’s like 50 years in Hollywood.

Much like celebrity marriages, long distance relationships rarely last long either.

My wife and I were in one for almost a year until we reached a breaking point. It was either we move to the same city or break up. The long goodbyes at the airport and the time apart took its toll on us. Fortunately, I was able to find a job in Phoenix and the rest is history. We’ll celebrate our 15th anniversary later this year.

Fixing and Flipping from Afar

Having a long distance relationship with a house can be a challenge too. Besides the obvious geographical separation there are several other issues to deal with, including:

  1. Learning the market and understanding what buyers in the area want.
  2. Building a whole new team of contractors, Realtors, lenders, appraisers and inspectors.
  3. Making important structural and design decisions without being at the property.
  4. Writing offers on properties – getting them accepted – and then having to drive or fly out to see them to do the inspection.

When J Scott, a fellow BiggerPockets.com contributor based in Atlanta, and I decided to do a joint venture fix and flip in Milwaukee, Wisconsin last summer, we had to start from scratch. Here’s what we did:

  • I found a Realtor there that found us a distressed house, which J and I bought.
  • J, using BiggerPockets.com members and their contacts in the Milwaukee area, built a team of contractors to rehab the property.
  • Meanwhile, I got my real estate license in Wisconsin so I could better understand the market and have access to the MLS to comp future deals.
  • J made 8 trips back and forth from Atlanta to Milwaukee to meet, consult, advise and do quality control with our contractors.
  • Along the way I found a better Realtor and more houses to buy.
  • J spent an entire week there working with the trades to finish up the property, which we put under contract last month and is set to close in a few weeks.
  • J hired our best contractor from the rehab to be our project manager for future jobs, meaning fewer trips back and forth to Milwaukee.

All of the travel cost about $15,000. Of course, some of this included sushi lunches, steak dinners and several bottles of wine. But, it was all a necessary expense. J and I bought a second property last month and have only had to go back once. The next time we visit, at the end of this month, the house will be finished. Hopefully there won’t be any surprises.

The lesson here is this – if you’re considering a new market to conquer in a land far, far away then be prepared to spend a few bucks on education and commuting. As you learn the market and build a team of trustworthy contractors your travel budget will be reduced.

And unlike Tom Cruise and Katie Holmes, you and your houses will live happily ever after.

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{ 8 comments… read them below or add one }

Lynn February 10, 2013 at 7:06 am

I’m looking to invest in the Austin Tx area. How can I build a team, living in NJ ??

Reply

Marty Boardman February 13, 2013 at 5:58 am

Lynn, I suggest you follow the steps I outlined in the post. Find a Realtor willing to work with you. This can be done from NJ. Then fly out to Austin and look at some houses and get a feel for the area. There are a lot of BP members in Texas that can probably recommend a Realtor, trades, etc.

Good luck!

Reply

Richard Bazinet February 10, 2013 at 3:34 pm

You have the right formula Marty. I have seen too many projects from afar fall apart because of an absentee new owner and the wrong team members.

Reply

Marty Boardman February 13, 2013 at 6:01 am

Richard, the travel expenses hurt but now that our team there knows we’re for real things are going really well. Thanks for reading!

Reply

J Scott February 10, 2013 at 7:23 pm

As Marty’s “other half” in the Milwaukee adventure, I second everything he says above, and have one other thing to add — having partners and team members with very complimentary skill sets is a big key to success!

I’m pretty sure neither Marty nor I could be doing this on our own. While we both have the full range of skills required to be successful in this business, rehabbing long distance requires above average skills in all areas. The places where I’m weakest, Marty is strongest, and vice versa. And the places where we’re both weakest (like knowing the local market), we’ve found awesome team members.

Btw, Marty must have written this post earlier in the week, because we just picked up #3!

Reply

Marty Boardman February 13, 2013 at 6:03 am

Also J, we both operate full time fix and flip businesses in our home markets of Atlanta and Phoenix. It would be tough for us to take on a long distance deal alone, there aren’t enough hours in the day.

Reply

Brian Burke February 10, 2013 at 8:36 pm

Congrats guys! Having been through this myself, and about to do it yet again, I can say from experience that you included the right steps. Way to go!

Reply

Marty Boardman February 13, 2013 at 6:04 am

Hey Brian, hopefully it’s some place warm! Good luck!

Reply

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