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 :)
Real Estate Agent · Colorado Springs, CO · Member since 2017 · 74 posts · 29 votes
9y
@Amit Kumar I believe when you narrow down your focus to an area and drill-in on getting one deal done in one specific market you will gain confidence with some experience and network with out-of-state investors. I hear Chicago is a really prime market for remote deals and rehabs; maybe @Elbert D. will be a great team member in the Midwest.
Baltimore is a good market as well; depending if you are going to flip or hold. Either way, I would say pick a spot, virtually network (BiggerPockets plug), and see if you get comfortable. I am in Northern VA, so if you decide Baltimore is a market you find interest in, don't hesitate to PM if I can ever help. Excited to hear your successes!
Real Estate Entrepreneur / Investor · Chicago, IL · Member since 2016 · 688 posts · 367 votes
9y
@Ernest Chamblee I am! In fact, I'm actually a great team player. And your absolutely correct. Chicago and northwest Indiana area great area for remote deals and rehabs. We have have our own rehab crew and rehab properties for investors. We also have property managers who help manag properties if investors out of state need those services too.
Specialist · Denver, CO · Member since 2015 · 80 posts · 26 votes
9y
I met an investor who teaches people how to invest out of state. He shows people how to use websites, some of them free, that have data in local areas. You're able to gain insight on the strength of the market from sites like bea.gov, berkadia.com, neighborhood scout, and several others. Basically, he can help you determine where to invest and what areas to stay away from.
His name is Tony Spandrio. He's based out of Denver, but does talks all over the country. There's a 2 day workshop in Denver on September 9th and 10th. If anyone's interested let me know and I'd be happy to connect you.
Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes
9y
@Amit Kumar I started OOS REI with a turnkey company in Jacksonville, and they actually flew me out there on their dime. That company has been great all along, but when I looked to diversify to other areas (and other strategies), I hit a lot of bumps and companies that were not up to the same standards of integrity and service. But there are a few who do deliver on their promises. I think it is really important to visit a market and meet the folks you are considering investing with at least once. There is nothing like a face to face. This doesn't have to be for every property, but if you can't visit the market at least once, then you are adding a layer of risk to what is already a risky investment strategy - OOS investing. Turnkey investing is not as passive as many would have you believe, even if it is is relatively passive to some other REI.
BTW there are other more passive ways to invest in REI that I discuss in my BP blog article
Investor · Tromsø, Norway (Europe) · Member since 2015 · 431 posts · 194 votes
9y
@Larry Fried Wow, they flew you out to visit? That's great! I doubt they'll do the same for me, as I live in Norway currently ;) Me and my boyfriend have booked flight tickets for Jacksonville in May and look forward to having a look around with the help of realtors and turnkey-providers.
Could I ask you to PM me with the name of the company you used? They sound great.
Rental Property Investor · Brentwood, CA · Member since 2015 · 39 posts · 14 votes
9y
I was stuck in your situation exactly 2 years ago and know exactly what that's like. My advice is to start talking to some people in local REIA's as much as you can and leverage those people's systems and boots-on-the-ground teams. Property management is massively important for what we do in buying rentals out of state. For me it boils down to four things when selecting a market for turnkeys / passive investing:
1.) Purchase Prices
2.) Cap Rates / Average Rents
3.) Property Management
4.) Local Economic Health and Outlook.
One more thing to consider (but should not necessarily drive your market choice completely) - do you have family or friends in any of the markets you are considering? It would be really nice to write off all the trips you take to visit them.
Investor · Orlando, FL · Member since 2016 · 355 posts · 380 votes
9y
@Ingrid J., have you considered Orlando as well? The Orlando Metro Area has added about 400,000 residents in the last 5 years and is a fast appreciating market for home values and rental rates. I have market reports if you like. PM me.
Developer · Little Ferry, NJ · Member since 2016 · 426 posts · 226 votes
9y
@Lane Kawaoka If you're ever looking to buy anything in New Jersey, I am your guy. I mainly do fix and flips but as I am growing my business exponentially, I try to acquire as many connections as possible when it comes to private investors and out of state investors that want to partner.
Out of state investing should really be a thought once you feel that you have maximized your local area and produce enough income where you can afford to start a network of people outside of your state. Currently, my goal is to be everywhere I can be but at the same time trying to get my company branded in NJ. I want to have the opportunity to partner with people on BP out of state, but at the same time focus on NJ because this is why my core business model lies.
Turn Keys are definitely the way to go out of state if you don't have a large network of people where you're buying. Just buy turn key or development and hire a PM to manage it. But make sure the PM is credible and doesn't try to play any games.
Investor · Scottsdale, AZ · Member since 2015 · 130 posts · 102 votes
9y
@Amit Kumar I started out of state with turnkey - I loved Indianapolis as a market and own 4 turnkeys there. I've bought turnkeys in a couple other markets as well and tried to get better returns. What I learned was that the feet on the street mattered more than the market (within reason.) Most of the markets are similar with some having better CoC returns and some having better appreciation.
I like turnkey as an intro to out of state investing because you get a lot of hand holding and can see if you love real estate enough to deal with it, so to speak. This can be everything from tenant issues, to reporting. There is a lot of great advice on here, but I would reference check on BP both the TK company and the PM. I would call other PMs in the area for advice on the property to see if it matches what the TK and PM company say, and of course all of the other standard due diligence that would match your criteria. If you need more help on the DD, let me know or message me, more than happy to help.
San Diego, CA · Member since 2017 · 33 posts · 7 votes
9y
@Andrew Ashby have you worked with anyone doing out of state BRRRR? I think ideally that's what I would want to do but realistically turnkey would be my best option
Investor · Orlando, FL · Member since 2016 · 355 posts · 380 votes
9y
@Amit Kumar, no out-of-staters doing BRRRR yet, most of mine are looking to do buy-and-hold...but I can always connect people with good lenders and contractors.
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.
Real Estate Agent · Fort Collins, CO · Member since 2016 · 246 posts · 142 votes
9y
@Jeff Tropeano, I like to build relationships with a lender and tend to go with one recommended by my broker. Sometimes there are limitations to this, if you're investing in a certain state and your go-to lender isn't licensed there. However, in that case you can usually do well going with one recommended by your broker. I learned from experience that going with a lender that either knows you or some other professional vested in the deal makes things go as smoothly as possible.
Real Estate Agent · Fort Collins, CO · Member since 2016 · 246 posts · 142 votes
9y
I have bought in a couple different states without doing any visits/seeing the property. Any time you invest there is risk but I think the best way to mitigate that risk is by having a great team! Do your research, if you're going turnkey go with a team that has a proven track record and scaled operations, preferably with the whole team under one roof. Then develop criteria for that market, analyze properties, buy one and make that money.
Real Estate Investor · Centennial, CO · Member since 2015 · 106 posts · 38 votes
9y
Hi Amit, I recently purchased my first rental property out of state in Kansas City, MO. I went down the path of using a full-service broker meaning the real estate broker/agent, contractor and property management components are all under one roof. I worked with the broker to find a home and estimate the rehab so we could submit an offer. They are currently doing the rehab work and then it will be transitioned to the property management company. I also looked into turnkey but wanted to have some equity from the start by finding a property in need of work and doing the rehab. I made trip to Kansas City to meet the team before starting and I'm making another trip in a week to see the finished home. Send me a message if you'd like to discuss further. Good luck!
You can also use zillow, wikipedia and google to research the city, home prices, local economy, ect.
These are just for starters. The process is very time consuming but worth it in the end. It took me about 6 months of research before I felt knowledgeable enough to invest out of state. Once you've figured out your city (or cities) and your criteria for buying, it becomes very easy to recognize a good deal. The first one will always be the hardest. PM me if you want any advice.