Forget Demographics—Research THIS Before Investing in a New Market
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 of investors every single day, from all over the world. So, I want to share with all of you remote investors about how to successfully invest far from home.
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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 aside. I’m begging you.
What You Should Actually Focus on When Choosing Where to Invest Remotely
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 the 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.
Heck, even if you're looking to invest 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. That 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: The Top 3 Reasons You Should Never Invest in Real Estate Out of State
The Importance of 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 five, 10, or maybe even 15 years for you to build a substantial portfolio and achieve financial freedom. To 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 markets?
Let us know with a comment below.