San Diego, CA · Member since 2017 · 33 posts · 7 votes
For out of state investors - how did you do it?
I'm going to have difficulty travelling out of state to evaluate properties/build a team given my circumstances. Turnkey sounds reasonable but I have seen a few horror stories.
Investor · Mission Viejo, CA · Member since 2016 · 36 posts · 20 votes
9y
I purchased in Memphis through a turn key company, you can also just call realtors directly in the area you want to invest. It's not hard to get deals out of state somewhere like that, but when you start looking at more competitive markets it gets much more difficult.
Picking a market is hard, but once you do I'd just call realtors, property managers, brokers, etc and talk to them. Ping people here on Bigger Pockets in those markets and ask them about it. If it was easy everyone would be doing it :)
Rental Property Investor · Coeur d'Alene, ID · Member since 2017 · 17 posts · 78 votes
9y
To piggy-back on this, how did you decide WHERE to start investing? I have all of the same questions, at Amit, but also, why would I pick Indianapolis over Houston? Or Atlanta over Jacksonville? Or...?
Do I just need to pick a couple towns and then deep-dive on everything about the city, the economy, the politics? What does that kind of due diligence even look like? I feel like I'm spinning my wheels because I don't know what I don't know.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
9y
research, plenty of well documented areas out there. You also have a ton of ways to find information/reviews to assemble your team. Lastly, don't be afraid to fly out to see in person the areas you've been considering and interview the people you've been assembling. What's a few hundred dollars in travel cost in the grand scheme of things...
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
9y
I can tell you how they are doing it with me here in MI.
Steps:
1 - LLC is established (us) and using the LLC's Cash buys/rehabs (if needed) property with Cof O and tenant in place
2 - LLC makes Partnerships available for cash
3 - Out of State Partners become members of the LLC owning the property and they receive a % of the income from the LLC (cash flow from property)
4 - Original Managing Member (us) remains and is responsible for all goings on involving the LLC and the property.
5 - Property is professionally managed.
Completely passive to the OoS REI, and the Managing Partner stays onboard to handle all those long distance problems...with a vested interest remaining in the property as well.
One of the biggest attractions, we have found, is for the OoS investor "flipper" that wants to Cash Flow. Their current State/Market works for flips...but is too expensive for CF. They now have a way to get the CF by flipping in their Market, and investing their profit in this Market for the CF...on a continuous basis. Very popular. Especially when you consider the Managing Partner (us) stays in the deal as the active "boots on the ground".
Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
9y
Amit Kumar at first I did not visit my properties but did eventually. As crazy as it sounds I did do a connecting with investors. And cross-referencing those investors. After that I just bought a few and then I got the hang of it.
Investor · Mission Viejo, CA · Member since 2016 · 36 posts · 20 votes
9y
I purchased in Memphis through a turn key company, you can also just call realtors directly in the area you want to invest. It's not hard to get deals out of state somewhere like that, but when you start looking at more competitive markets it gets much more difficult.
Picking a market is hard, but once you do I'd just call realtors, property managers, brokers, etc and talk to them. Ping people here on Bigger Pockets in those markets and ask them about it. If it was easy everyone would be doing it :)
Rental Property Investor · Ashburn, VA · Member since 2016 · 239 posts · 119 votes
9y
You can hire a PM that can do most of the rehab work for you. I was surprised to find out that this job even existed 12 months ago. There's a gentleman in Baltimore named Tom Black who is throwning away jobs he so busy with other peoples projects.
East Brunswick, NJ · Member since 2016 · 13 posts · 3 votes
9y
I agree, I have looked into a Turnkey operation in Jacksonville which sounded appealing initially. However, after all expenses including property management, returns were only aroind 4 percent- I am looking for more cash flow. I have heard that Memphis has some Turnkey companies, anyone have recommendations?
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
9y
I too will speak to Memphis turnkey properties. They've been very good and extremely good at communication, which I think is important.
As far as market for out of state, I'm focusing on Memphis and cleveland. I'm actually in Cleveland this weekend,
Meeting people I've been talking to for a bit now and looking at a couple properties.
It's hardest when you start but once you get your team and get a couple properties under your belt, it all goes much smoother.
PM me if you have specific questions
Investor · Boerne, TX · Member since 2015 · 139 posts · 71 votes
9y
Great advice so far. I started in Cleveland by accident as I read several posts about the area and became interested. I then joined a mailing list for deals by @Matt Motil and then searched BP to see if anyone had done business with him. All of the reviews were postive so I gave him a call and asked a bunch of questions. I felt comfortable with what I read and heard so I bought a duplex with his help. He then recommended a mortgage broker, insurance agent and property manager. I followed the same process; looked them up on BP, called and asked a bunch of questions, and then hired the insurance agent and property manager. So far, everything is going very well and I never stepped foot in Cleveland. Since it has gone well, I plan on visiting and assessing whether or not I want to expand in the market.
BP is a great resource for learning about REI as well as getting real feedback from actual investors that have done business with the people that you need to help you purchase out of state.
Vendor · Cleveland, OH · Member since 2016 · 24 posts · 9 votes
9y
Hi Amit, first off welcome to BP! this is a great time to get into real estate, but like in other investment you should do your home work very carefully. start with your budget and strategy: do you want to invest in prime markets or secondary ones? have you considered leveraging?
there are many markets out there, don't let your location dictates where investment will be. I've invested in 5 markets so far, you are more than welcome to DM me on PB and I will try to assist every where I can.
For out of state investors - how did you do it?
I'm going to have difficulty travelling out of state to evaluate properties/build a team given my circumstances. Turnkey sounds reasonable but I have seen a few horror stories.
Turnkey can be a great way to invest out of state! My only suggestion to you is to make sure you do your research into the company and the market.
Rental Property Investor · Cleveland, OH · Member since 2016 · 653 posts · 769 votes
9y
@Caleb Heimsoth I'm interested to hear your thoughts on the differences you've seen in Cleveland vs Memphis. I'm investing in Cleveland right now but was thinking about flying down to Memphis or Houston to check things out in person.
Sounds like you haven't bought yet in Cleveland, but what sort of criteria are you using to decide where to invest?
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
9y
@Ryan Evans Feel free to PM me if you have more questions. Basically from what I can tell Memphis is going to have slightly higher price points in general, but less Multifamily stock. Cleveland has a slightly lower price point in general and much more multifamily available in general.
My first property in Memphis in B class and i'm doing C class in cleveland to start.
San Diego, CA · Member since 2017 · 33 posts · 7 votes
9y
@Steven Gillmer your post is exactly what I was wondering. You purchased the property without physically seeing it. I think that's the only way I could conceivably do this (for the time being) but glad to know it's possible if you do some leg work.
I got stuck on this a few years back, pulling what little I had of my hair out trying to find great markets (was looking for a home run since it would be my 1st long distance project). Finally I just picked markets where I had REI friends, the idea being someone local with RE knowledge could check in if something went wrong and I couldn't be there. That's how I ended up doing a flip in Lafayette last year (never went there, saw it only through pictures) and now looking at Memphis.
I'm now at the point where I need an on-the-ground and network (since I want to build a long term portfolio so I need PMs/contractors/etc). It looks like that's where you are too? I'm just going to use BP and go from there. I will fly out at some point.
For out of state investors - how did you do it?
I'm going to have difficulty travelling out of state to evaluate properties/build a team given my circumstances. Turnkey sounds reasonable but I have seen a few horror stories.
Hey there! Hope all is well. In which state and markets are you interested in investing? What is your exit strategy - if not turn-key?
Real Estate Entrepreneur / Investor · Chicago, IL · Member since 2016 · 688 posts · 367 votes
9y
@Amit Kumar how aggressive do you plan on go into real estate? What kind of ROI and or cash on cash return are you seeking for buy and holds or fix and flips?
Chicago is a great market for either flips and rentals. It just depends on your ROI or Cash on cash return that your seeking. There are about 4 neighborhoods to stay away from. The rest range from decent to good to great. Northwest Indiana is also a great area to invest in especially for buy and holds as the taxes are much cheaper than Illinois. I'm noticing more and more people from California and Utah beginning to invest in the Midwest. If you or anyone else needs help or a little direction jsut PM me and I can help.
Investor · Victoria , TX · Member since 2015 · 38 posts · 11 votes
9y
@Amit Kumar, Yes I understand, that's what I had to do for my comfort level at this point. But for future markets where I don't know anyone, such as Dallas/Fort Worth (my ideal market right now), I'll have to expand my comfort zone to trust people, put the work into networking & visiting to find local partners, contractors, etc. Then testing them out (and they test me) to see what long term relationships we can form.
@Amit Kumar, Yes I understand, that's what I had to do for my comfort level at this point. But for future markets where I don't know anyone, such as Dallas/Fort Worth (my ideal market right now), I'll have to expand my comfort zone to trust people, put the work into networking & visiting to find local partners, contractors, etc. Then testing them out (and they test me) to see what long term relationships we can form.
Don't buy from them...partner with them. Make it so the person that is "out of state" has a vested interest in the deal.