Real Estate Deal Analysis & Advice

Forget the Demographics and Focus on Researching THIS Before Investing Out-of-Area

Expertise: Real Estate Investing Basics, Personal Development, Landlording & Rental Properties, Real Estate News & Commentary, Business Management, Flipping Houses, Real Estate Deal Analysis & Advice, Personal Finance, Real Estate Marketing
236 Articles Written
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I just got off a phone call with an investor, and I’m frustrated. Let me tell you why. I speak to around 10 investors a day who are looking to invest from out of state or out of the country. I speak to a ton investors every single day, from all over the world. So I decided to make this video blog article about how all of you out of state and country investors can successfully invest remotely.

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Now, I got off the phone with an investor and think about how every single time I speak to someone, all we’re discussing is stats, demographics, employment rate, vacancy statistics, school districts, etc. Don’t get me wrong; this stuff is very, very important, I understand that. But that is not the first thing that you need to look at when you are trying to invest out of state or out of the country. Guys, change your mindset. Put the stats and demographics second. I’m begging you.


Related: After Only Buying Locally, I’m Managing Remotely for the First Time Ever: Here’s How

It’s the People Factor That Matters

I feel like the Red Cross most days because I talk to so many investors from all over the world who have been screwed by people—not by the stats, not by the demographics, but by people. Over the last five years, I've come to this conclusion that you have to focus first and solely on establishing trust and relationships with key people on the ground before you invest out of state or the country. Even if you're looking into investing in your own backyard, you still need to have the right people to succeed. You need a good accountant, attorney, real estate agent, contractor, and property manager. This is what's going to make you successful or not.

I’ve got a saying, and it goes like this: If you buy the best house, on the best street, in the best area, with the best capital growth projections but your property management company is incompetent or they’re cheaters and liars, they’re going to steal your rent or they’re going to lose your rent. So, it really doesn’t matter how good the stats and demographics are. It comes down to the people.

Related: What Moving Out of State is Teaching Me About Remotely Managing Rentals

Establishing Trust

So to everyone looking at investing from afar, out of state or out of the country, focus on the people first. Make sure that those people have your best interests at heart. Real estate is not a one night stand; it’s a marriage—meaning, you have to like and respect each other. It’s going to take 5, 10, or maybe even 15 years for you to build a substantial portfolio and achieve financial freedom and get to where you need to be. So, anyone who is looking at flogging you a property quickly is not someone you want a relationship with.

Remember the concept of delayed gratification within relationships. Plant the seed now and reap the harvest later. And then, once you have established trust and relationships with great people, it’ll be time to look at the stats, the demographics, the cash flow, the price points, the school districts, the vacancy statistics, and all of those jibber jabber numbers.

What’s the first thing you look at when vetting out-of-area locations?

Let me know with a comment!

Engelo Rumora, a.k.a."the Real Estate Dingo," quit school at the age of 14 and played professional soccer at the age of 18. From there, he began to invest in real estate. He now owns real estate all over the world and has bought, renovated, and sold over 500 properties. He runs runs Ohio Cashflow, a turnkey real estate investment company in the country (Inc 5000 2017 & 2018) and is currently in the process of launching a real estate brokerage called List’n Sell Realty. He is also known for giving houses away to people in need and his crazy videos on YouTube. His mission in life is to be remembered as someone that gave it his all and gave it all away.

    Ron T. Investor from Santa Barbara, California
    Replied over 2 years ago
    I agree and know I need a trustworthy team before I start making offers on homes. However, the only thing that has kept me from starting to make connections and a team is that I don’t know what state and city to concentrate on. I know each team must be local to the city so most of my reasearch first is on determining just that. I may make some calls to local realtors and my questions are just on stats. When I find the city I want to work with them my plan was to make the necessary connections and form the team you mention is so important. Do you have advice on the most important stats and demographics in selecting a city? Thanks, Ron
    Engelo Rumora Specialist from Toledo, OH
    Replied over 2 years ago
    Thanks Ron, I would actually start the other way around and find a great team first before picking a city/market. It can just be 1 individual that you strike up a great relationship with that leads to building or finding a team. Stats to follow is how undervalued the properties are and what the cashflow is. I’m based in Toledo, Ohio and buying properties all day long at 20, 30 cents on the dollar that offer amazing cashflow. Lot’s of it will depend on your end goals and particular strategy when evaluating the stats of a market. Thanks again and much success
    Juan Carlos
    Replied almost 2 years ago
    How do you ‘buy all day long’ even if at 20 30 cents on the dollar, without running out of money. Please excuse the newbie question.
    Engelo Rumora Specialist from Toledo, OH
    Replied almost 2 years ago
    Deal flow makes cashflow Plus a proven reputation has enabled us to seek out additional capital if we ever ran out Thanks
    Christopher Smith Investor from brentwood, california
    Replied over 2 years ago
    That’s always been my approach. I have had a number of folks approach me about investing in real estate at a distance because they know I have done it before and they are right I have. However, the only long distance investing that I have done is in locales where I already have all the business model infrastructure in place. In other words, I already have long term established relationships in place with a RE agent, RE management company, insurance agent and so on. That permits me to focus on the viability of investment because I have a tried and tested business model already in place that will deal with the acquisition and ongoing operational mechanics. I’d be very reluctant to invest at a distance starting from scratch. Can’t say I would never do it, but the opportunity would have to be extraordinarily compelling to take on all the additional risk of ab initio investing.
    Engelo Rumora Specialist from Toledo, OH
    Replied over 2 years ago
    Thanks for your comment Chris and 100% agreed. Team work makes the dream work lol Much success
    ChokSheak Lau from Seattle, Washington
    Replied over 2 years ago
    Good reminder Engelo. I know you have said the same thing multiple times, and I do agree with this concept. Wish that you will continue being the right people on the ground who believes in win-win deals! If you succeed, that means everyone around you are succeeding together with you and your team! The last thing that the world needs is another dishonest dealer to cheat other people’s money, or another self-serving political figure. It seems like your team has been doing a great job so far and wish you much continued success!
    Engelo Rumora Specialist from Toledo, OH
    Replied over 2 years ago
    Thanks for your comment Chok, Great to hear from you. I’ve been “preaching” the same words for many years now. A good team will either make or brake an investment thus being much more important than the stats/demographics of an area. Take care and speak soon mate 🙂
    Maggie T.
    Replied over 2 years ago
    I currently live in California and am about to invest in a property to live in on the East Coast. Never having lived there, I first made my choice based on climate (not to hot nor too cold) and size (I need to have at least one big hardware close by as I intend to flip more properties there). I then “toured”, on Street View, towns I found interesting. Once I got that far, I started looking at properties on the various real estate websites. Each one I found in my price range, I first checked out again on Street View; this can be an invaluable tool, not only to become familiar with a new area but most importantly to weed out the undesirable neighborhoods. I now have 2 towns pinpointed. I had originally thought to wait until I moved out there before buying my first property, but after 2 years of scoping out this much I feel I can make a pretty informed decision. I have since been in contact with a realtor who is somewhat older and who has lived his whole life in the area. He obligingly called me from a property I had found interesting and as we walked through it together he gave me his best advice. I’m looking at properties in these two towns every day and feel confident that if I find a great buy, he will be able to help me decide whether or not to put in an offer sight unseen; I know he’s the right realtor as he did nothing to pressure me on the first property, as well as the fact that he’s been working in the area for many years thus he will have all the contacts I need. In fact, he suggested having an inspection done on any property before I even make an offer. I’m well aware that none of this is technical or stats-based in any way, but adhering to the law of “location, location…”, plus having an inspection up front, plus having a realtor to be my eyes on the ground and to run the comps, I feel quite confident that I can make the right decision even before I move.
    Engelo Rumora Specialist from Toledo, OH
    Replied over 2 years ago
    Thanks for your comment Maggie, Sounds like you have been very active in your target market and I’d like to commend you on that. To be honest tho, I think you are quite a few key people away from running a successful operation. Other folks that your team should also consist of are contractors, property manager, maintenance personal, attorney, title company, etc… It takes a bunch of great people in order to successfully make deals happen. I’m fortunate to have an amazing bunch of folks around me that took me 5+ years to establish. I’m proud to say that i’m the dumbest of them all lol Much success
    Edward Synicky Rental Property Investor from Yorba Linda, CA
    Replied over 2 years ago
    Living in California all of my life but stopped investing in my home state since 1989 as it became painfully clear the numbers did not work. The best way to invest out of state is not to reinvent the wheel. Just focus on an area then ask our big pocket members who own property in the chosen city for their team members. I am in many states for many years and have a great team in Phoenix, Nashville, Charleston, Mobile, Birmingham, Salt lake and others. I would be glad to share my team with anyone. I know they are good as I have honed them to perfection, some did not make the cut but their replacements did.
    Engelo Rumora Specialist from Toledo, OH
    Replied over 2 years ago
    Awesome Edward and great advice. Bigger Pockets definitely has a wealth of knowledge with many folks doing great things in different markets. I get bombarded daily for my contacts but am a bit selfish when it comes to giving out their details lol We do many deals every month so i don’t want them distracted with other inquiries Much success
    Andrew Syrios Residential Real Estate Investor from Kansas City, Missouri
    Replied over 2 years ago
    The most important thing when investing out-of-state is definitely the operator and management company you’re working with.
    Engelo Rumora Specialist from Toledo, OH
    Replied over 2 years ago
    Thanks Andrew and agreed. Have a great day
    Hosnah Agban Investor from Doha, Qatar
    Replied over 2 years ago
    Very true. Having a solid property management and operating team is a key. Many newbies miss considering this on their first purchases. Thank you Engelo.
    Engelo Rumora Specialist from Toledo, OH
    Replied over 2 years ago
    My pleasure Hosnah, No one really looks into the team and just focuses on the market itself. Bad idea in my opinion Much success
    Hank Keller Rental Property Investor from Mansfield, OH
    Replied over 2 years ago
    Engelo – I would put Trust of the company at the same level as the metrics. It is hard to find a good company that you can trust AND understands what metrics to look for in a market. Population, Jobs, Cheap houses and government are the four keys i look for in a market. For the company, they should have construction, property management and brokerage in house. They should have dedicated customer service, great systems and NOT be high pressure. I’ve been fortunate to find all that in a turnkey company in Indianapolis (good market) and have built up the trust in knowing the company over the past four years. Rather than high jack this post, PM me if you’d like to know more about good markets and good turnkey companies..
    Engelo Rumora Specialist from Toledo, OH
    Replied over 2 years ago
    Thanks Hank, I disagree and would put finding the right people first way before the metrics of a market. Experience with investing all over the world has lead me to believe that the people will either make or break an investment and not the metrics found in any particular market. Congratulations on your success in Indiana and have a great day
    Daniel Pollock Real Estate Investor from Brooklyn, New York
    Replied over 2 years ago
    Thank you Engelo, great inf and advice as I look to build my power team!
    Engelo Rumora Specialist from Toledo, OH
    Replied over 2 years ago
    No worries, Thanks for your comment and much success
    Ken Goodman Investor from Los Angeles, California
    Replied about 2 years ago
    Totally agree. In addition to the people you have listed, I also think it’s important to develop key relationships with your lender, your title company, and your leasing agent.
    Tommy Daggett
    Replied 5 days ago
    Great Article, Sir! Also enjoyed reading you Profile/Bio.