Step ONE for Investing in Out of State?

Question

It's definitely a massive challenge to investors looking for a solid property, good return, and great management .... and to feel GOOD about the team you are working with.

• Who is looking for deals out of state?
• What has worked well for you? 
• What steps have you taken that have helped you be successful?
• Long term goals?
• Refinancing strategies?
• BRRRR over Turn Key? 
• What else?

Ali Boone · Answer

Are you asking for yourself as an out-of-state investor? It looks like you're a turnkey provider. Are you polling the audience?

Account Closed · Answer

@Nathan Brooks I have a pretty deep real estate and finance background with a heavy lean on REITs and online investing. I developed a trading platform back in the day specifically designed for real estate securities and partnered with Nasdaq on a series of REIT Indexes. So, I know some things! Let me know if you have any questions.

Account Closed · Answer

Hey @Nathan Brooks have you considered investing in REITs or through online real estate investing platforms? Less of a hassle and much less expensive.

James Wise · Answer

Buying out of state can be very easy if investors follow a few simple rules.

• 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.

Tom Ott · Answer

For me, step one would be identifying a market. Something in the Midwest that is not over saturated with investors. Not first to the party, but for sure not last!

Omari Heflin · Answer

I Love the BRRRR method. You need to have your numbers right but you really can gain some traction pretty quickly by doing this. If your out of state its very important to try to setup your team.

1. Find a good wholesaler who can bring you deals to BRRRR

2. Find a good PM company

3. Have your lender setup

4. Have them work together so it can be fully serviced and hands free

Nathan Brooks · Answer

Account Closed we haven't personally. Focused on SFR rentals and then learning more on the apartment and syndication side. Have you done much with the REIT's / platforms? Experience with it?

Mike D'Arrigo · Answer

I would say the first thing to do is identify what kind of investor you are and how you want to buy.  Are you a passive investor or do you want to be more active? If you want to be more active, do an assessment of how active can you be. Ask yourself the following questions:

• Do you have the time to be hands on or will you be too occupied with work and family?
• Do you have the right skill set? You don't need to be a contractor but you should have some basic construction knowledge and be able to speak a contractors language. 
• How big of a portfolio do you want to build? If you're only going to buy 1 or 2 properties, it's probably not worth the learning curve needed to build teams and crews and do it yourself. On the other hand, if you're goal is to build a sizeable portfolio, you'll have economies of scale that may make it worth it.
• What's your risk tolerance? Doing everything yourself and managing it from out of state is very risky. Buying turn key can be much lower risk when you're working with a good turn key company.

Step ONE for Investing in Out of State?

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