New to investing - looking out of state

2 Replies

Hi BP community! I am new and looking to get started in buy and hold with as much cash flow as possible. I currently have a full time job and am an active RE agent on the side (nights and weekends) in NYC, so this would be part time (for now). I am looking to go out of state in single or multi family homes and apartment buildings (6+ units included) because the NYC market is so expensive with little to negative cash flow. I have about $200k saved up to start investing and have been religiously studying RE investing for the past 6 months and am ready to get my feet wet! I am looking for advice on the following: 1. Ideas on where start looking to target a specific market (will probably take out a mortgage on my first investment) 2. Advice on how to landlord out of state especially part time - eventually I would look into property management but if I were to purchase 1 property to start off, it would eat right into my entire returns 3. How to source deals out of state. I understand I can build my lists for direct mail, digital marketing etc. but how can one actually educate themselves on a market when they are not present all of the time to drive around neighborhoods, network and meet as many investors, local RE agents, wholesalers etc. 4. I am assuming it is going to take at least 3-6 months to actually find my first deal. Would you still suggest traveling out of state every weekend to learn and educate myself? This would probably cost thousands of dollars over this period to travel this much, so I am unsure how to go about this. Any help/advice would be much appreciated. I look forward to becoming an active RE investor! Thank you

Hi @Jason Rosenbaum ! Your chances of success as an out-of-state investor increase dramatically if you set reasonable investment objectives upfront, take your time to identify and learn your target market, and build a solid and high-quality ground team from among unconnected, best-in-class professionals.

Regarding your questions, my take is as follows: 1. Follow the money, mainly population flows and economic growth. I'd look at the South and Southwest, in particular. 2. Budget for PM from Day One. If the deal won't support it, it's not really a deal. 3. Talk to tons of landlords, wholesalers and investor-focused agents. Get on the mailing list of wholesalers in prospective target markets and then paper trade their deals to see who's for real and who is not. 4. Unless you've got a huge travel budget, or millions of frequent-flier miles, I wouldn't recommend travel at all until you've done all the desk work you can. Then, once you've chosen a winner, plan to visit that target market (and its many sub-markets) and assemble your ground team.

Connect with me here on BP if you'd like to chat more.

Jason,

I was in your shoes a few years ago. After looking in our local market for close to a year I decided to focus my energy elsewhere and became an out of State Investor.

Your target will be determine by your goals. Memphis is probably one of the hottest markets now, but the cat is out of the bag we all know how hot the market is in Memphis I'm sure there's a lot of competition from what I hear. You need to determine do you want to throw your hat in the ring in a hot market or look for the next future hot Market, there are pros and cons in either option.  

If you have a full time job here in NYC and planning to invest Part-time I highly recommend finding a Property Manager, even with only 1 Property. Don't be surprise if it will take you several tries before finding the right PM. My PM charges 8% of my monthly rent, I negotiated 50% of month rent as finder fee for finding tenants.

I picked 3 markets when I started, after doing hours of research and visited all 3 markets I picked one. There are so many markets that are more affordable compare to ours that you need to focus your time and energy on only a few and then execute..

Good luck...

Raul R.

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