Investing in another city/state

21 Replies

I am interested in hearing from others how they started to invest in other cities/states. Who does your walk through? Do you have to hop on a plane for every closing? It seems like something that would be very difficult to do through just phone calls and emails but it seems like many people have managed to pull it off with the assistance of local PMs and contractors that can do repairs.

I live in Miami and I am interested in investing in Jacksonville, so worse case scenario if I need to be present at the property for anything it'll be a 5 hour drive.

Thanks!

We have properties in different parts of the country but never intentionally invested from long distance. However, we have helped many others invest in Jax. My wife is an agent and project manager while I'm used as the local expert and we've suddenly become a de factor TK operation for investors across the country (including several clients in Miami) 

Ultimately I think you have to find people you trust and you have to communicate effectively. Besides that, I would definitely visit, walk/drive in various neighborhoods, and meet with potential partners face-to-face. 

Good luck! Miami to Jax isn't too scary. 

Thank you for the response @Maxwell Lee

Right now I was planning on contacting the listing agent for the property I am interested in, however my concern is he of course won't be unbiased. I definitely plan to drive up during for a  weekend to have a look at some of the properties and neighborhoods myself.

@Dyanne C.

I have several investments in Jacksonville, but I live in Oregon.  So quite some distance.  All my investments in JAX were done via a turnkey company.  For the first one, they flew me out, put me up in a beach hotel, and provided me with a car.  I got to know the properties - both new builds and renovations that they do, and the neighborhoods.  I selected my first property from that tour - it was actually a lot with new construction home to be built on it.  In short I got to know the company and what they offered really well, and when the property performed, I bought more properties from them sight unseen, but knowing the work they do, and the service they provide.  It is all about building trust and confidence, so I didn't have to make the long, time consuming and expensive journey repeatedly.

Medium dgi logo rgbLarry Fried, Do Good Investing, LLC | [email protected] | http://DoGoodInvesting.net | OR Agent # 201211636

Thank you @Larry Fried

That was exactly the type of information I was looking for. I definitely don't mind traveling to get a feel for everything at first, but its good to know you can eventually do everything remotely since it will be difficult to travel while I still have my 9-5.

@Dyanne C.

  there are companies called that specialize in out of state investors.. its commonly called Turn Key investing.. there are literally hundreds of them nationwide.. some are fantastic and some are not... so doing due diligence your self is important along with buying in an asset class your comfortable with and will perform over time

Medium ksqoekox 400x400Jay Hinrichs, TurnKey-Reviews.com | Podcast Guest on Show #222

All my properties are out-of-state and I've never been to one closing for them. The lenders overnight all the documents, and notary instructions, and then it just gets sent back to them. 

Miami, awesome! I'm from there originally.

Medium hipsterinvestment logo black300dpiAli Boone, Hipster Investments | [email protected] | 310‑957‑2101 | https://goo.gl/x52ZKJ | CA Agent # 01911993

Hi Dyanne

I have great family,  and a great realtor but I fly down to do a walk through during the 10 ten day inspection. Nothing beats your feet on the ground , don't buy without you being there. Run the numbers ,do your due diligence and  please look at what you buying in person. I live in N.Y. and buy in Florida but would buy anywhere

Just my opinion 

John R. Farrell

For those of you that have bought out of state, did you do all cash deals or did you finance? I'm seriously considering a long distance rental either within Florida or the Dallas area.

You definitely need to find people you can trust. An agent is going to be one of the toughest ones to start with. In my experience trying to invest in FL from VA I went through 10 agents before I got one that would work with me. Most never would call you back once you tell them what you are doing. Next is trying to find a contractor you can trust from afar and this is tough as well. Hear the old saying "while the cats away the mice will play"? If no one is there to make sure they stay on top of things you can wind up with notices from the city (been there done that got the t-shirt) I would go down periodically to see the homes I was trying to buy and learn the area. Knowing the area was key for me because if I would not live there I would not my tenants to live there. Thankfully my agent would try and steer me away from those areas. Documents are done electronically and over night, you do not have to be there in person. Good luck.

Disclosure:  Company Owner

We've developed a niche business that compliments our own investing, where we provide ground services to out of market investors wanting to leverage the growth and stability in the DFW market.

We do everything from providing acquisition assistance to doing the project management on the rehab. We start with a narrated video tour and stills of the subject property. A full property analysis, including ROM of required repairs, a CMA and a market rent analysis. We also help facilitate any necessary inspections and line up a max of 3 contractor estimates, including one from our contractor as a baseline. Once the property has closed, we can provide full project management through the life of the rehab. We don't provide PM services.

Anyway...that's not an advertisement. It's just an illustration of what you can get done for you without ever being in the market you are investing in. The project we just completed was for an investor in Tokyo. It was an estate property we found through a wholesaler friend of mine and had a $30k+ rehab budget. The property wouldnt qualify for underwriting in its initial dtate, so the investor went in woth HML and then financed out to conventional. The investor has only laid eyes on the property through the lens of my camera.

It isn't all that difficult. You just need a ground team you are comfortable with and trust. 

I would love to know how much these folks make on a rental out of state. I have to beat the pavement to find decent deals and they have to be in good neighborhoods because exit strategy and so many instances of tenant issues that one would have to pay a tradesman to fix or evaluate.It seems like a lot of things have to go right to make any money. You know you can buy stocks in a real estate reit. Silver bay, two harbors etc all they do is rental real estate, and you can buy a small portion of a giant professionally managed portfolio, and benefit from price appreciation and earn returns via dividends. plus you can sell in one day if needed. besides that why jacksonville? port st lucie has good cap rates and high demand for rentals and only two hours away

Wow, thank you everyone for commenting. I really appreciate all the input.

@John Farrell I agree and that was one of the reasons I felt a little uncomfortable, but then again I also find it difficult to go to another city every time I see a potential deal. Sure I can make a list but who knows how long deals will stick around. I feel like I want to see things in person but eventually will need to do things remotely for practicality.

@Ali Boone Nice! I've wanted to pick up and relocate away from Miami, but I'm stuck because of work. Maybe when I get the investments off the ground I'll have more flexibility to move around without chasing work. ;)

@Will Grabert I hadn't even thought of port st lucie. When I decided to invest outside Miami I simply started researching towns I had visited or knew people who lived there. Figured that would be easier than 100% internet research. But now I can look into a new area as well. Thank you!

Originally posted by @Dyanne C. :

Nice! I've wanted to pick up and relocate away from Miami, but I'm stuck because of work. Maybe when I get the investments off the ground I'll have more flexibility to move around without chasing work. ;)

Dyanne, look to your own situation for insight.

Look around, and invest where the jobs are!  A growing workforce is definitely one of the biggest driving factors behind a healthy local economy (and a good place to invest in RE).

totally agree with Robert G Jobs is #1, although florida has the retirement "driver" which may not get you any tenants put keeps pressure on housing demand, especially safer (crime wise) communities

For sure! Where would you want to go you think? I can tell you for certain there will be some aspects of Miami you won't be able to find anywhere else! :(

Medium hipsterinvestment logo black300dpiAli Boone, Hipster Investments | [email protected] | 310‑957‑2101 | https://goo.gl/x52ZKJ | CA Agent # 01911993

Originally posted by @Jay Hinrichs :

@Hattie Dizmond

  we need to talk I could blow your business up!!!

 Jay...PM me any time or just call me directly. We are ready for our business to blow up!!  In fact, one of my partners just quit his 9 to 5 job, so we now have a full-time person to run our projects. 

I think that having long distance investments is something that every RE Investor should consider. It can add diversification to your portfolio. And some markets are better than others. But you have to consider if such a transaction fits your specific investment strategy and risk tolerance.

When I consider an investment out of my area, I will research the market as much as possible. I than will make a trip or two to get familiar with that market. I will work with a local agent and I personally inspect the property before making a decision and I attend all the closings, that is just my personal preference. I will also go inspect the property a couple of times a year. I will generally buy a few properties in one market to make the travel worthwhile. If it is an area I wouldn't want to visit, I wouldn't buy there.

I also get a local team set in the area realtor, PM and maintainence so I have someone to call when a problem arises.

Steve

Originally posted by @Steve Combs :

I think that having long distance investments is something that every RE Investor should consider. It can add diversification to your portfolio. And some markets are better than others. But you have to consider if such a transaction fits your specific investment strategy and risk tolerance.

When I consider an investment out of my area, I will research the market as much as possible. I than will make a trip or two to get familiar with that market. I will work with a local agent and I personally inspect the property before making a decision and I attend all the closings, that is just my personal preference. I will also go inspect the property a couple of times a year. I will generally buy a few properties in one market to make the travel worthwhile. If it is an area I wouldn't want to visit, I wouldn't buy there.

I also get a local team set in the area realtor, PM and maintainence so I have someone to call when a problem arises.

Steve

 I agree, you might get lucky buying out of state, sight unseen from a dependable turnkey provider, but a huge part of real estate investing is mitigating your risk through due diligence. 

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Originally posted by @Dyanne C. :

I am interested in hearing from others how they started to invest in other cities/states. Who does your walk through? Do you have to hop on a plane for every closing? It seems like something that would be very difficult to do through just phone calls and emails but it seems like many people have managed to pull it off with the assistance of local PMs and contractors that can do repairs.

I live in Miami and I am interested in investing in Jacksonville, so worse case scenario if I need to be present at the property for anything it'll be a 5 hour drive.

Thanks!

Sometimes as an investor you may find it necessary to invest outside of where you physically reside for a plethora of reasons. Regardless though, having some 'feet on the ground' or local presence of some sort is often crucial -- especially when it comes to physically inspecting the property to get a firm grip of the exact repair cost and if a rehab deal, managing the rehab process and those involved. If many investors still manage to bungle local deals in the cities that they reside in, trying to 'pull it off' by phone can be expected to involve some challenge. The profits however may justify such undertakings though.

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