Finding areas to investigate for new Long Distance Investor

[Michael Kuznetz]

Hi all and thanks in advance for your feedback.  
What advice would you give a new investor looking to find out of state opportunities? 
How would you go about narrowing down the country if your plan was to find a property and get it rental ready for under 130k, no loans, with the intention of a minimum of 9% COC return?  With no local connections in any possible markets, is it a matter of hopping around the country on Zillow and comparing home prices and rents or are there ways to streamline the process?

Thanks!!

[Kerry Noble Jr]

build those connections locally! it is a must for your success. with those numbers itll definitely be the midwest

[Chris Davidson]

@Michael Kuznetz I would review your numbers and also dig deep for what your real goals are. Do you care more about a CoC return or not getting a loan. If you limit the Cash into the deal, you can increase your cash on cash return.

But like you need a team where you are investing. You can find the best deal out there and ruin it with a sloppy team, or you can find a ok deal with a rock star team and turn it into a great deal.

Best of luck and feel free to reach out if you want to talk about what is needed in a team.

[Jared Trindade]

Quote from @Michael Kuznetz:
Hi all and thanks in advance for your feedback.  
What advice would you give a new investor looking to find out of state opportunities? 
How would you go about narrowing down the country if your plan was to find a property and get it rental ready for under 130k, no loans, with the intention of a minimum of 9% COC return?  With no local connections in any possible markets, is it a matter of hopping around the country on Zillow and comparing home prices and rents or are there ways to streamline the process?

Thanks!!

 I would do some independent research on individual market areas that may meet the criteria of what you are looking to achieve. Once you have identified the potential market that may give you said return, then find people to build a team with and proceed with investing once you are 100% prepared to do so. 

Check out market data posts on places, for example I have done many on NC, and Fayetteville NC may fit your bill check out my post and see if there's any value there for you. https://www.biggerpockets.com/...

Ping ideas from BP people and then check out some of those markets. From there, network and build. 

If you'd ever like to connect and chat more about NC, let me know if I can be of service to you. 

Best of luck to you,

Cheers!

[Kathie Russell]

Quote from @Kerry Noble Jr:

build those connections locally! it is a must for your success. with those numbers itll definitely be the midwest

Building relationships is the absolute most important thing!  Join the REIA in the area where you are considering investing.  It will provide all kinds of connections that you will need, and leads that will be invaluable.

[Travis Biziorek]

Your budget is going to largely dictate markets you can play in. With $130k you're likely looking at the Midwest.

I tend to favor Detroit because I now have 12-doors there, a super strong network, and a good friend that runs a turnkey operation on the ground there. You can't beat the cashflow in Detroit. And if you position yourself smartly, you can capture appreciation there as well as the city is going through a bit of a renaissance that most don't seem to understand and/or believe quite yet.

[Michael Kuznetz]

Quote from @Chris Davidson:

@Michael Kuznetz I would review your numbers and also dig deep for what your real goals are. Do you care more about a CoC return or not getting a loan. If you limit the Cash into the deal, you can increase your cash on cash return.

But like you need a team where you are investing. You can find the best deal out there and ruin it with a sloppy team, or you can find a ok deal with a rock star team and turn it into a great deal.

Best of luck and feel free to reach out if you want to talk about what is needed in a team.

Thanks Chris,
I definitely appreciate the feedback and have thought about the possibilities of going loan/no loan and how it affects the deals.  I'm hesitant to get into a loan at the moment with rates being where they are but hopefully things will come down a bit and make the numbers work better.  Finding the team is going to be a crucial step, and I'll definitely shoot you a message to get your thoughts!  Thanks!!

[Michael Kuznetz]

Quote from @Travis Biziorek:

Your budget is going to largely dictate markets you can play in. With $130k you're likely looking at the Midwest.

I tend to favor Detroit because I now have 12-doors there, a super strong network, and a good friend that runs a turnkey operation on the ground there. You can't beat the cashflow in Detroit. And if you position yourself smartly, you can capture appreciation there as well as the city is going through a bit of a renaissance that most don't seem to understand and/or believe quite yet.

Hi Travis,
I am a U of M grad from 98 and remember getting lost in Detroit one night.  It was an interesting experience!  I'd be curious to hear about your operation and experiences.  Will send you a message.  Thanks

[Jewel B.]

Quote from @Michael Kuznetz:

Quote from @Chris Davidson:

@Michael Kuznetz I would review your numbers and also dig deep for what your real goals are. Do you care more about a CoC return or not getting a loan. If you limit the Cash into the deal, you can increase your cash on cash return.

But like you need a team where you are investing. You can find the best deal out there and ruin it with a sloppy team, or you can find a ok deal with a rock star team and turn it into a great deal.

Best of luck and feel free to reach out if you want to talk about what is needed in a team.

Thanks Chris,
I definitely appreciate the feedback and have thought about the possibilities of going loan/no loan and how it affects the deals.  I'm hesitant to get into a loan at the moment with rates being where they are but hopefully things will come down a bit and make the numbers work better.  Finding the team is going to be a crucial step, and I'll definitely shoot you a message to get your thoughts!  Thanks!!

 As long as the numbers still work, don't overthink the rate. We got spoiled off low rates, but as far as historical averages go, these rates are pretty fair. I'd rather buy more than one property now and refinance later if rates go down then only buy 1 and sit around waiting for rates to maybe go down to who knows what %. And then of course the market will be more competitive at that point. There's no perfect time. Leverage can be a powerful tool.

[Drew Sygit]

@Michael Kuznetz

You might want to follow the "Deep Dive" series we're doing on our BiggerPockets blog about Metro Detroit cities, City of Detroit Neighborhoods and comparing Metro Detroit to other hotspots investors usually consider:

https://www.biggerpockets.com/...
(BP search feature can be problematic, so we’ve also added links @ our website under View Cities & Neighborhoods We Service)

Doubt you'll find this much info for any other market in the country. So, why would you invest remotely anywhere else?

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[Jared Hottle]

I would say there are alot of Midwest areas that could pull these numbers for you. Certainly look into Iowa. I would be able to help you.

[Eliott Elias]

Stop looking out of state and stay within your back yard. There are deals to be found in any market, unless you have a BA team waiting to plug and play it's going to be a headache. 

[Joseph Crunkilton]

Michael, 

I was in a similar situation and it was definitely overwhelming. I did a lot of networking on here and connected with @Zach Lemaster who helps OOS investors get going. He helped me with my first few deals. 

There's a million things you can analyze and it becomes a big headache. He helped me shorten the learning curve and get me going quicker than by myself.