How to start out in other states??

18 Replies

Hello, I’m new to this forum. Looking for some guidance to invest and building long term rental properties. Has anyone invested in CA and what are their experiences Versus out of state? How did you build your team in other states? What about turnkey companies? Thanks.

I haven’t invested in CA but I’ve invested in out of state, with turnkey and non turnkey.

@Manpreet Jagur I've never invested in CA as the deals are not yielding much Cash Flow from what I can see. However I've provided turnkey service for investors from west coast and out of country. The process usually starts with deal analysis and a visit to the city. 

They get a chance to look at all of their prospective areas first hand, tour properties, meet with property management and get answers to their questions and based on if they feel if it's a worthwhile investment they'll elect to move forward. 

We had a collection of our own properties and other investors that we knew had solid properties. We set everything up from tours, transfer to property management and even kept in touch up to a year after purchase to make sure property performing. We did what we were able to accommodate.

Let me emphasize that meeting property management should be a requirement. This has been a huge downer for most out of state and out of country investors because too many times the property management isn't competent. 

Also understand that things happen whether you live 10 minutes from the property or a 4 hour flight. That's real estate. It's the way it's handled that is the difference maker. I'd recommend property inspections prior to purchase so you're aware of current and potential issues that may arise. 

There is no such thing as a perfect property, even if it was finished being built this morning. However with due diligence and a competent team you can have yourself a good investment portfolio. 

Originally posted by @Manpreet Jagur:
Hello, I’m new to this forum. Looking for some guidance to invest and building long term rental properties. Has anyone invested in CA and what are their experiences Versus out of state? How did you build your team in other states? What about turnkey companies?

Thanks.

 Turnkey can be a great way to invest out of state when you live in an expensive market. Ideally, a Turnkey provider will own, renovate, and manage their property all in house. It should be 100% passive for you and easy.

Let me know if you have any questions.

I have properties now in CA and outside of CA. Outside of CA I have one property that I purchased non-turnkey and the rest are from turnkey companies. The property in CA is local to me in Venice and I landlord it myself (contrary to everything I preach). 

My CA property-- extremely expensive, negative cash flow every month, requires me to work because I manage it myself.

My non-CA properties-- much more affordable, solid cash flow every month, allows me to be fairly brainless outside of occasionally needing to put the smack down on a property manager. But that takes up very little time on my part.

What are your goals in a property? Knowing that will help me point you one way or another. Because what you can get in CA versus outside of CA meet very different goals.

@Manpreet Jagur Please be aware that Real Wealth Network is not a turnkey provider per se, but a referral brokerage to providers in different markets.  Be sure you vet the actual provider you are considering.  To me it is best to include a visit to the market and a face to face with the provider before closing on the first deal.

Manpreet Jagur I’ve used turnkey properties (formerly Memphis turnkey) and have zero complaints so far.

Make sure you understand the difference between a provider and a turnkey promoter. A promoter is someone who refers you to people in different markets and earns commissions when you buy through their referral. They don’t own the property. A provider owns the properties they’re selling.

@ali boone, thank you for your invaluable input. Our goals are to have cash flow for retirement and accumulating assists for our kids. Appreciation on property would be a bonus. I appreciate your help.

Hello Manpreet. We can help you in Dallas-Fort Worth and in Indianapolis.
DFW is getting more difficult to cashflow, but with some patience the right properties do show up.
Indianapolis is easier to find properties, in fact we have a portfolio of 11 doors available right now in a great neighborhood. PM me for more info and we can discuss if we are a fit.

Originally posted by @Manpreet Kaur :
Hello, I’m new to this forum. Looking for some guidance to invest and building long term rental properties. Has anyone invested in CA and what are their experiences Versus out of state? How did you build your team in other states? What about turnkey companies?

Thanks.

 Welcome to the site Manpreet.

It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.

  • Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
  • Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
  • Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
  • Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
  • Make sure your property manager is a licensed real estate brokerage.
  • Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.

@Manpreet Kaur having done phone calls and texts or messages over BP with fellow investors (mostly from CA) all it usually takes in a message on BP to get it started.

If I feel I can provide value I’ll give my phone number and go from there.

@Manpreet Kaur ,

 I have properties in California and in Texas. Depending on where you’re buying in Cali you can still cash flow well and expect appreciation. 

 You will obviously get more for your money out of state which is why I started investing in Texas. 

  My strategy is to look for towns with major colleges and hospitals and then start networking from there. 

 Good luck!

Mike

Hi @Manpreet Kaur . Let me first say welcome to BP. Let me recommend a book I just read which was VERY helpful and easily readable. Well let me say I didn't read it because I purchased the audio version and listened to the book. Anyways, I live outside of US and am obviously an long distance investor. This book will give you knowledgable insite to investing long distance. CA is not easy to cash flow hence long distance investing. Turnkeys are easier especially if you are new to investing. Most turnkeys you should cash flow, but long term appreciation is hard to come by. Good luck to you