Investor · MA · Member since 2022 · 9 posts · 1 vote
Hi all! I am currently looking to purchase a small multi-family property and was thinking of purchasing out of state in order to have a lower entry point regarding my down payment amount and purchase price. My goal is to enter a cheaper market that has strong cash flow. I am looking for any advice on the process you followed purchasing a property out of state:
Did you visit the property prior to purchase, or use another source to view the property for you?
How were you able to find a strong property manager in that area and what qualities did you look for in choosing the right manager?
What obstacles did you face in finding and closing on the deal?
so im on the other end and thats working with the OOS investors and providing them with background and boots on the ground for the properties in their market. Definitely open to answer any questions you may have.
You may want to first decide on the geographic location, and then find contacts and build the team. Visiting the property -- highly recommended but I think not required if you have a really good realtor/PM.
General ideas for you. I hope it's helpful.
OOS investing has become quite common. Here are the major factors to consider in evaluating the market
Your budget: are you looking to buy under $200K, $200-300K, $300-500K or higher? It can help you create a short list
Population growth, employment growth, wage growth, composition of business types are the most important factors in the health of the market. There are many analysis, charts out there. Specifically. places where the millennials are attracted to are interesting as they are becoming the biggest renter and homebuyer group
(Note: Be careful with 'historical' data. The top growing markets in the last 2 years are unlikely the most sound choices. Good examples are Austin and Phoenix. Try to add the futuristic lenses into your analysis whenever you can. In the ideal case, there be a "new California" emerging somewhere in the next 10 years. But to be frank, CA's trajectory is impossible to replicate as working remote has become more prevalent, companies more “decentralized”, and more people think about not just professions, but also lifestyles these days).
Are you able to find trustworthy realtors/PMs or even service providers? Do not get into a market before you know whom to work with. Many investors interview many to find the best one. In my case, I started in the Houston area as my friend had very good recommendations for me. So use your network to get more ideas!
Cost, with the effective property tax rates being one of the major ones. It typically range from 0.5%-2%+
Rental regulations as some States are more friendly to renters while some more friendly to investors
Distance to you. If you find a good area 2-5 hours drive from you, it’ll be easier to meet your team and check out the properties in person
Certain hazards or costs that you want to avoid. Drought, flooding, snowstorms, tornados, just to name a few