{"id":131804,"date":"2020-11-06T05:00:21","date_gmt":"2020-11-06T12:00:21","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=131804"},"modified":"2023-06-22T09:33:46","modified_gmt":"2023-06-22T15:33:46","slug":"find-real-estate-deals-long-distance-investing","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/find-real-estate-deals-long-distance-investing","title":{"rendered":"How To Find Real Estate Deals When Long-Distance Investing"},"content":{"rendered":"<p>Imagine receiving a $20,000 check to purchase a rental property. How about step-by-step guidance from some of the most experienced <a href=\"https:\/\/www.biggerpockets.com\/rei\/glossary\/real-estate?itm_source=ibl&amp;itm_medium=auto&amp;itm_campaign=glossary\" target=\"_blank\">real estate<\/a> investors in the industry? Well, that&#8217;s exactly what the <a href=\"https:\/\/www.biggerpockets.com\/blog\/contributors\/steverozenberg-2\" target=\"_blank\">Dream Investment Adventure Series<\/a> is all about.<\/p>\n<p>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. Throughout the next two months, the pair will research markets, build a team, purchase a property, complete a renovation, <a href=\"https:\/\/www.biggerpockets.com\/rei\/glossary\/lease?itm_source=ibl&amp;itm_medium=auto&amp;itm_campaign=glossary\" target=\"_blank\">lease<\/a> the property, and everything in between without Joe ever seeing the property in-person.<\/p>\n<p>So far in the Dream Investment Adventure Series, we have covered goal setting and <a href=\"https:\/\/www.biggerpockets.com\/blog\/learn-invest-remotely-joining-dream-investment-adventure\/\" target=\"_blank\">identifying investment criteria<\/a>. Next, we helped Joe to <a href=\"https:\/\/www.biggerpockets.com\/blog\/determining-market-invest-remotely-dream-investment\/\" target=\"_blank\">define his rental market<\/a>. Most recently, Joe found his <a href=\"https:\/\/www.biggerpockets.com\/blog\/find-property-manager-out-of-state-rental\/\" target=\"_blank\">local investment team<\/a> in Atlanta, including a realtor and property management company. Let&#8217;s dive into week 4 to analyze potential deals!<\/p>\n<h2>Investing in Out-of-State Property<\/h2>\n<p>Last week, Joe was tasked to <a href=\"https:\/\/www.biggerpockets.com\/blog\/find-real-estate-deals\" target=\"_blank\" rel=\"noopener\">find good real estate deals<\/a> to analyze in the Atlanta area. Potential properties must fit the criteria Joe defined earlier in the process. Setting clear, non-negotiables removes the temptation to select a property based on feelings.<\/p>\n<p><strong><em>Related: <\/em><\/strong><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/2015-05-10-invest-out-of-state-how-to-analyze-a-city\" target=\"_blank\" rel=\"noopener noreferrer\">Looking to Invest Out of State? Here\u2019s How to Pick and Analyze a City<\/a><\/em><\/p>\n<p>Furthermore, it forces you to make decisions based on numbers. Nick Fitzpatrick, Joe\u2019s real estate agent, joins Steve in today\u2019s episode to discuss how they worked remotely to look at properties.<\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/jwePayTpdCc\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<h2>Inspections Help You Avoid Bad Deals<\/h2>\n<p>Technology is your friend when doing a deal remotely. Joe accompanied Nick to look at some properties via FaceTime. They experienced a rough start and had to drop out of a couple of contracts. Due diligence revealed the homes needed too many expensive repairs for the numbers to work.<\/p>\n<p>Sometimes deals fall through, but that is a normal part of the remote investing process. A mold issue in one property could have cost Joe $6,000 down the road.<\/p>\n<p>It can be frustrating to see a deal fall through, but stay positive. As an investor, larger issues can be avoided through inspections and support from a local team. Keep in mind, future issues could have a large effect on a deal\u2019s profitability. Every win and loss is an opportunity to learn lessons and become a smarter real estate investor.<\/p>\n<p><strong><em>Related: <\/em><\/strong><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/2016-06-17-building-teamultimate-guide\" target=\"_blank\" rel=\"noopener noreferrer\">How to Hire Amazing Team Members for Every Real Estate Process\u2014From Finding Deals to Renting Them Out<\/a><\/em><\/p>\n<h2>What If You Can\u2019t Find an Investment Deal in Your Target Area?<\/h2>\n<p>If issues arise when looking for investment properties that fit your criteria, either change your parameters or widen the search area. Joe ultimately expanded his search area to include Lithia Springs, which is located about 20 minutes west of downtown Atlanta.<\/p>\n<p>Joe and Nick found a property in Lithia Springs to analyze. What initially looked like a <a href=\"https:\/\/www.biggerpockets.com\/blog\/mastering-turkey-real-estate-build-passive-portfolio\" target=\"_blank\" rel=\"noopener noreferrer\">turnkey property<\/a> ultimately was the BRRRR deal he had been searching for.<\/p>\n<h2>Analyzing a Deal Using the BiggerPockets BRRRR Calculator<\/h2>\n<p>The <a href=\"https:\/\/www.biggerpockets.com\/brrrr-calculator\" target=\"_blank\" rel=\"noopener noreferrer\">BiggerPockets BRRRR Calculator<\/a> was created to simplify the process of analyzing returns on potential fixer-upper properties. You can estimate the potential cash flow and evaluate the profitability of a property. This also works for remote investors looking to invest out of state.<\/p>\n<p>Here&#8217;s how Joe used the BiggerPockets BRRRR calculator to analyze the deal to determine if it fits with his goals and strategy.<\/p>\n<ul>\n<li><strong>Original Listing Price:<\/strong> $134,900<\/li>\n<li><strong>Offered:<\/strong> $110,000<\/li>\n<li><strong>Purchase Price:<\/strong> $114,000<\/li>\n<li><strong>Estimated ARV (After Repair Value):<\/strong> $180,000<\/li>\n<\/ul>\n<p>The property was originally listed at $134,900, and the seller was highly motivated. Frustrated with several contracts that fell through, they were about to pull it off the market.<\/p>\n<p>After discovering the home needed some work, Joe offered $110,000. The seller returned with an offer of $114,000 which Joe accepted. As a cash deal, there are minimal closing costs involved, so they estimated that at around $1,200.<\/p>\n<p>In six months, Joe should be able to refinance the home and pull out most\u2014if not all\u2014of the money he invested.<\/p>\n<p><strong><em>Related: <\/em><\/strong><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/2013-01-19-real-estate-math\" target=\"_blank\" rel=\"noopener noreferrer\">Rental Property Numbers So Easy You Can Calculate Them on a Napkin (With Real-Life Example!)<\/a><\/em><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-117287\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/10\/calculate-deal.jpg\" alt=\"Calculating\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/10\/calculate-deal.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/10\/calculate-deal-300x144.jpg 300w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<h2>What to Consider When Making an Offer<\/h2>\n<h3>The Seller\u2019s Motivation<\/h3>\n<ul>\n<li>If sellers are or are not highly motivated<\/li>\n<li>Whether the home has previously been under contract several times<\/li>\n<li>Whether or not previous deals fell through<\/li>\n<li>The seller&#8217;s potential frustrations or emotional state<\/li>\n<\/ul>\n<h3>Repairs Needed<\/h3>\n<ul>\n<li>The home needed extensive repairs to be rent-ready<\/li>\n<li>Sellers often prefer to drop the price vs. fix the property before a sale<\/li>\n<\/ul>\n<p>These factors gave Nick and Joe more room for negotiation on price.<\/p>\n<p>Technology combined with an expert team on the ground allows you to complete the purchase process remotely without sacrificing due diligence.<\/p>\n<p><strong><em>Related: <\/em><\/strong><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/how-to-estimate-rehab-costs\" target=\"_blank\" rel=\"noopener noreferrer\">The Simple 6-Step Process for Estimating Rehab Costs<\/a><\/em><\/p>\n<h3>Rehab Plan and Costs<\/h3>\n<p>Planned renovations at Lithia Springs investment property are as follows:<\/p>\n<ul>\n<li>\u00a0New roof<\/li>\n<li>\u00a0New siding<\/li>\n<li>\u00a0Changing countertops<\/li>\n<li>\u00a0Fixing toilet leak<\/li>\n<li>\u00a0Adding fourth bedroom in the basement<\/li>\n<\/ul>\n<blockquote><p><strong>Pro Tip: <\/strong>Add value by converting a space into an additional bedroom to increase rent and home value<\/p><\/blockquote>\n<h2>Using the Expertise of Your Team<\/h2>\n<p>When investing remotely, your team acts as your eyes and ears on the ground. Each member contributes their advice, experience, and analytical skills, and you use that data to evaluate the deal.<\/p>\n<p>Now that you have invested the time and research to build your dream team in a market, the next deal is easier. Simply repeat the process for a second property using the same team you have established a relationship with.<\/p>\n<h2>\u00a0Homework Week #4<\/h2>\n<p>Joe\u2019s homework is to do due diligence on the property and close the deal. He will also begin building a list of contractors for the rehab. Tune in next week to learn exactly how to handle due diligence and what it takes to close real estate investment deals remotely.<\/p>\n<p>To find out more about Joe\u2019s investing journey, gain access to investor tools and resources, and help your own remote investment journey, check out the <a href=\"https:\/\/www.mynd.co\/dream-investment-adventure?utm_source=online_partnerships&amp;utm_medium=biggerpockets&amp;utm_campaign=dream500&amp;utm_term=bp_blog_post&amp;utm_content=video\" target=\"_blank\" rel=\"noopener noreferrer\">exclusive destination page<\/a> for BiggerPockets fans only. You\u2019ll also find a limited-time BiggerPockets <a href=\"https:\/\/www.mynd.co\/dream-investment-adventure#BP-Deal?utm_source=online_partnerships&amp;utm_medium=biggerpockets&amp;utm_campaign=dream501&amp;utm_term=bp_blog_post&amp;utm_content=video\" target=\"_blank\" rel=\"noopener noreferrer\">exclusive offer for property management<\/a>!<\/p>\n<p><a href=\"https:\/\/www.biggerpockets.com\/calc?utm_source=blog\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-117195\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/10\/Signup_3.jpg\" alt=\"\" width=\"728\" height=\"90\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/10\/Signup_3.jpg 728w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/10\/Signup_3-300x37.jpg 300w\" sizes=\"auto, (max-width: 728px) 100vw, 728px\" \/><\/a><\/p>\n<p><em>Questions? Comments?\u00a0<\/em><\/p>\n<p><strong>Join the discussion in the comment section below.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Imagine receiving a $20,000 check to purchase a rental property, as well as step-by-step guidance from some of the most experienced real estate investors in the industry&#8230; Now watch what happens when it becomes a reality in the Dream Investment Adventure series.<\/p>\n","protected":false},"author":612019,"featured_media":113644,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5524],"tags":[],"class_list":["post-131804","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-investing-for-beginners"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/131804","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/612019"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=131804"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/131804\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/113644"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=131804"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=131804"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=131804"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}