How to Achieve Steady Cash Flow on Your Remote Investment
Imagine receiving a $20,000 check to purchase a rental property. How about step-by-step guidance from some of the most experienced real estate investors in the industry? Well, that’s exactly what the Dream Investment Adventure series is all about.
Follow along with our contest winner, Joe, and his journey of purchasing an out-of-state rental property. Through the mentorship of Steve Rozenberg, Head of Investor Education for Mynd Property Management, they learn about investing remotely.
Dream Investment Adventure Recap
So far, we have learned how to identify investment goals and strategy, determine a rental market, and find a local team. After that, we learned how to analyze real estate deals and perform due diligence on a property. Joe even completed a rental property rehab without ever seeing the home in person!
Last week, we learned about the leasing process. Specifically, how to successfully move a tenant into an ou- of-state rental property. This week, our Dream Investor Adventure series comes to a close. We will recap learnings from the process. In addition, we’ll look at what went wrong and what we did well.
The Remote Investment Deal Is Complete!
Joe has a tenant in the property, and he met his investment goal.
Final Numbers on the Deal
- 75% of the $170,000 value will be refinanced in 6 months
- 15% cash-on-cash return (once he refinances)
Joe invested about 100 hours of work into this deal. There was a learning curve involved since this was his first remote deal. His second deal in Atlanta should take significantly less time. Plus, Joe can easily take his remote investing formula into a new market and repeat the process.
Let’s review the process of completing an investment deal remotely.
Create Actionable Steps
Investing in a city you are never going to step foot in can be intimidating at first. Don’t let the thought of investing remotely scare you. Start off with a positive, “can-do” mindset. Overcome apprehension by breaking up the process into a list of manageable steps:
- Identify the market you will invest in.
- Assemble your team (real estate agent, property management company, and contractor).
- Find investment deals.
- Analyze the deals.
- Do due diligence, and make an offer.
- Rehab the property (if applicable).
- Lease the property.
- Review your lessons learned.
Pro Tip: Keep your focus on getting to the next step.
A Plan Makes Action Easier
It is hard to take action if you don’t know where to start. Having a well thought out plan broken into small steps is essential. Throughout the Dream Investment Adventure series, we’ve shown you how to navigate the process of investing remotely. Use the series as a guideline to develop your own action plan.
Take note of Joe’s lessons learned. For example, have a contractor picked out well in advance of the rehab.
Pro Tip: The secret to successfully investing remotely is having a strong, experienced team on the ground.
The Remote Team Is Your Key to Success
You want to be able to trust they are giving you sound advice and good numbers. So, perform due diligence when it comes to researching their reputation. Don’t be afraid to ask for references!
Your team’s recommendations and guidance will be based on their understanding of your strategy and goals. Be clear when communicating your expectations, goals, and preferences with the team.
Remote Investing Lessons Learned
After each remote investment deal, analyze how it went.
- How can you avoid problems next time?
- Can you make the process more efficient?
- How can communication with the team be improved?
- If you could do it all over again, what would you do differently?
- Do you need to adjust the steps in your process?
When you are investing remotely for the first time, you are creating a repeatable formula. Because this is a new experience, it is going to take extra time. You will learn what worked and what did not.
After each remote investing deal, you can fine-tune your formula. Every experience is a chance to grow as an investor, so you are working smarter and faster the next time.
Pro Tip: You have invested the time building your local team, so use them again for a second property.
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Your Active Involvement Is Still Required
Remote investing doesn’t mean handing over everything to your team. You still need to be actively involved. It is your business, and you should oversee each step in the process. Make smart decisions based on the information and advice your team offers.
Take Advantage of Available Resources
There are a vast number of resources you can use to your advantage during a remote investing deal. Make the most of the expertise of your team and the educational content on BiggerPockets.
For instance, BPInsights provides valuable expert analysis and market data. The BiggerPockets Forums can be used to build relationships and find your dream team. The BiggerPockets Blog is full of articles, and BiggerPockets Podcasts are there to further your real estate investing education.
Property managers are a valuable resource when it comes to insight into the local rental market. They have access to proprietary data that can help you before you even purchase the property. Use them as a resource when selecting areas of the city to look for properties. They know which areas are good for rentals and can supply you with accurate rent amounts when you are running your calculations.
BiggerPockets and Mynd Property Management thank you for tuning in to the Dream Investor Adventure Series. We hope this has encouraged you to reach beyond your market and invest remotely.
To learn more about Joe’s investing journey, gain access to investor tools and resources, and help your own remote investment journey, check out the exclusive destination page for BiggerPockets fans only.
You’ll also find a limited-time BiggerPockets exclusive offer for property management!
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