The Video You NEED to Watch Before Buying Out-of-State Multifamilies

The Video You NEED to Watch Before Buying Out-of-State Multifamilies

2 min read
Matt Faircloth

Matt Faircloth, co-founder and president of the DeRosa Group, is a seasoned real estate investor. The DeRosa Group, based in historic Trenton, N.J., is a developer and owner of commercial and residential property with a mission to “transform lives through real estate.” DeRosa creates partnerships to finance select real estate investments and has a proven track record of providing safe, profitable investment opportunities to their clients.

Matt, along with his wife Liz, started investing in real estate in 2004 with the purchase of a duplex outside of Philadelphia with a $30,000 private loan. They founded DeRosa Group in 2005 and have since grown the company to hundreds of units in residential and commercial assets throughout the East Coast. Under Matt’s leadership, DeRosa has completed tens of millions in real estate transactions involving private capital, including fix and flips, single family home rentals, mixed-use buildings, apartment buildings, and office buildings.

Matt is an active contributor to the BiggerPockets Blog and has been featured on the BiggerPockets Podcast three times (show #88, #203, and #289). He also regularly contributes to BiggerPockets’ Facebook Live sessions and teaches free educational webinars for the BiggerPockets Community.

Matt authored the Amazon Best Seller Raising Private Capital: Building Your Real Estate Empire Using Other People’s Money. The book is a comprehensive roadmap for investors looking to inject more private capital into their real estate investing business and is a must-read for anyone looking to grow their business by using private lenders and equity investors. Kirkus, the No. 1 trade review publication for books, had this to say about Raising Private Capital: “In this impressively accessible introduction to a complex subject, Faircloth covers every aspect of private funding, presuming little knowledge on the part of the reader.”

Matt and his wife Liz live in New Hope, Penn., with their two children.

Matt earned a B.S. in Industrial and Systems Engineering with a minor in Business from Virginia Tech. (Go, Hokies!)

DeRosa Group’s YouTube channel

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There appears to be a “grass is greener on the other side” mentality going in in the real estate investing circles these days. What I mean by that is investors are looking for opportunities outside of their own local markets, looking across the country and even into other countries for the “best” market to get themselves in.

I am a big fan of the “acres of diamonds” mentality for new investors, meaning there are plenty of deals to get started on, right in your own backyard. But once you have established yourself as a viable real estate professional with a few deals under your belt, it may be time to expand your network. Investors do this for many reasons—diversification, expanding their brand, tapping into networks they may have, and capitalizing on areas with high potential for growth in the future.

What to Do When It’s Time to Expand to New Markets

We invested in our own area for years, building a portfolio that we were able to manage with our in-house team. Our investments were no more than 30 minutes from my office in downtown Trenton, New Jersey, and we did fine with that. We fund most of our projects through syndications with equity investors. Some of them weren’t comfortable with the greater Trenton MSA, and the deal size we could do here was only so large. For those reasons and others, we decided to expand our coverage and get into deals outside of our 30-minute radius.

Related: Looking to Invest Out-of-State? Here’s How to Pick and Analyze a City

In today’s video, I talk about what I’ve learned in our expansion outside of our local area into more regional investments. It’s imperative to do the right homework on these deals, especially if they are more than a drive away from your base of operations. There are certain factors that need to be considered that will make or break you, as well as work you need to do up front before you even start looking at deals. Watch the video to find out what those factors are and get some more detail on how to make an out-of-state multifamily investment successful!

I hope to get in some chatter with you in the comments down below, so please leave me some thoughts. Have you done an out-of-state deal already? How did it go and what homework did you do first?

Thanks for watching and have a great and profitable week!

In today's video, I talk about what I've learned by expanding outside our local area into more regional investments. These lessons could make or break you!