Contractor · Bronx, NY · Member since 2015 · 25 posts · 4 votes
I live in NY and have noticed it’s too expensive for me to invest here at least locally.
Have you ever purchase a property that you've never stepped foot in? Or at least only visited once or twice? I see some friendly prices out of state and was wondering if I had to be there often. Was thinking of the BRRRR....
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
7y
I bought a $460k townhome on lake Minnetonka in MN from MLS pictures and I live in Vegas. After it was under contract I had a realtor walk it and an inspector
I did that 3 years ago. I haven’t been inside it yet. I want to retire there someday so I took a 7 year $2700/mo lease.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
7y
I bought a $460k townhome on lake Minnetonka in MN from MLS pictures and I live in Vegas. After it was under contract I had a realtor walk it and an inspector
I did that 3 years ago. I haven’t been inside it yet. I want to retire there someday so I took a 7 year $2700/mo lease.
Contractor · Bronx, NY · Member since 2015 · 25 posts · 4 votes
7y
@Bill Brandt
Wow, that’s pretty cool!
I’m looking for my first property and saw one for about 20k and from the pictures that didn’t look too bad. It was in Kansas but I’m just looking to start with one at a price I can really afford and not worry too much I’m not looking to move there at all but maybe keep it for a few years and understand the real estate game some more.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
7y
If you haven’t been there I’m totally against investing without seeing the property. I knew the city and the area this property was in. Plus anything on that lake has a minimum value.
Imagine a $10k property in Detroit. It can literally be worth nothing. I’m sure there are d class landlord here and you could ask them but imagine how bad it has to be when no one buys a $20k house to live in.
If there’s nothing in your area you could move in to for a year and then turn in to a rental while you move to a new home. And nothing you could buy and get some roommates or rent rooms with Airbnb. Then the less exciting option is probably waiting until you have $20k+ as a down payment on a $100k or preferably $200k property.
Rental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
7y
We purchased three properties while I was in England and my husband was deployed. Two were new build, turn key rentals under property management at acquisition. The next one, I contacted a title company and asked for recommendations for Realtor, insurance agent, and asked the Realtor for a recommendation for a property manager. We never did see the inside of the two Texas properties (bought in 2012 and sold last year), and I finally made it into the FL rental when we were putting in new flooring at tenant turnover.
Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
7y
That sort of long-distance buying is yet another niche with a learning curve that has to be submitted to. Personally, it's not my niche. But there are people who do it very well and repeatedly.
Rental Property Investor · Wichita, KS · Member since 2016 · 64 posts · 29 votes
7y
I would agree it is not a good idea to invest without knowing the area. I live in Wichita Kansas and the market here is growing. Houses can be bought at a great price. I have only been doing this for 2 years but I now have three houses and a condo. I do have a really great property manager who runs it all for me. The crime in Kansas is on the rise and some areas are bad to buy in. So for me I would avoid getting into something you cant check yourself.
Rental Property Investor · Lenexa, KS · Member since 2017 · 76 posts · 63 votes
7y
I live and invest in the Kansas City market and I would personally never invest in a 20K house. In fact, you couldn't gift one to me. You pay for what you get. I'm guessing the property is a D class property and in a war-zone (some investors specialize in these!). You'll have greater expenses due to property damage and the type of tenant you'll be attracting. In general, cheap rent equals higher maintenance/expenses. On top of that, Kansas City has implemented pretty strict inspections for landlords which is also eating at your bottom line. Many landlords are leaving KC due to the hassle of the inspections and having to go to court. Bottom line: do your homework. If it's too good to be true - it probably is. The market is hot and the entire world is looking to KC as an investment vehicle.
I also would never buy any asset without doing my due diligence. For me, that includes knowing the asset inside and out. That's tough to do if you are going in blind without a team on the ground. You might be better off with a turn-key property but even those require a lot of due diligence. Plenty of investors have lost money on those from companies that over promise and under deliver.
Keep us posted if you pull the trigger on a 20K property and how it turns out.
Contractor · Bronx, NY · Member since 2015 · 25 posts · 4 votes
7y
@Matt Altrich thanks for the insight !
I was looking into Topeka, Kansas as I was in contact with someone on this group that purchased their first rehab there and that the area is getting better and will grow due to the a hospital that acquired property and more students going to be there. I see there are plenty of properties there and are all different price levels and saw what the rent would go for and thought hey maybe that’s it.
But I would not do anything just to do it. I’d always ask around like I did here because I know this group is very valuable.
Investor · Manassas, VA · Member since 2016 · 9 posts · 5 votes
7y
There's a great book to give you some insights on that. "Long-Distance Real Estate Investing: How to Buy, Rehab, and Manage Out-of-State Rental Properties" by David Greene. I'm reading it now on Audible. It highlights that this day in age we should be able to leverage the technology at our disposal to buy down the a lot of the risk of investing out of state.
I would agree it is not a good idea to invest without knowing the area. I live in Wichita Kansas and the market here is growing. Houses can be bought at a great price. I have only been doing this for 2 years but I now have three houses and a condo. I do have a really great property manager who runs it all for me. The crime in Kansas is on the rise and some areas are bad to buy in. So for me I would avoid getting into something you cant check yourself.
the Wichita market is great. it's like one of the hidden gems in the real estate world because when people think about investing in the midwest, some of the common cities mentioned are Kansas City and Indianapolis. Though they do have more of the necessities that make REI great. I also invest in Wichita while being out of state.
Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
7y
You will receive stories of success here but there are a lot more failures than success with this strategy. Human nature says people love to talk about a success but are often embarrassed to talk about failures.
So if one day and a $500 plane ticket skews the deal, don’t do it. Your a contractor, do you give bids on a job based on pictures and the owner’s description?
Rental Property Investor · Lawrence, KS · Member since 2018 · 28 posts · 42 votes
7y
@Jason Gamio I live in Lawrence, KS but work in Topeka, KS. There is money to be made in Topeka rentals. The area is being revitalized and I am expectant that it will continue to grow. However there are some areas you need to be careful of, my guess is the 20k property isn't a great area which won't attract great tenants or pull in great rent. I would try to look close to Washburn University, but I would get a lot of information from locals about the area you are buying in.
Contractor · Bronx, NY · Member since 2015 · 25 posts · 4 votes
7y
@Greg H.
I agree ppl don’t really share their failures due to embarrassment or lack of knowledge but those are ppl that are still afraid in my opinion.
The ones who succeed are the ones who face their faults and go out and seek advice/help to better themselves on the next one because they know there will be a next one!
Contractor · Bronx, NY · Member since 2015 · 25 posts · 4 votes
7y
@Laura Hines
Thank you for the reply!
I will continue to look at different places around there and others. The 20k property as you can imagine was a rehab property and thought after some repairs it would be a good opportunity for me.
I’m not looking for anything cheap but I read properties there aren’t too expensive there in to begin with.
Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
7y
Jason,
Before investing OOS you need to do a lot of homework. Need to fly to the area drive it and rate it. This is the only way. Can't just go off of some website or realtor saying its a good area.
I invest in OOS. I live in CA and invest in TX. I have family there and I already know the area and I travel there 4-5x a year. It can be done and the hard work is usually in the beginning.
In your case buying $20k homes. Don't do it. It's trash. There is no value in buying those. Look at it this way. To rehab, a house is $20-25k and you want to buy a $20k house? Think about that.
I think a lot investors that start looking at OOS they see these low price homes and automatically think I can buy 1 or 5 of these rents it for X and I am rich. Woo Hoo! Doesn't work that way. Those are the investors that lose their shirts investing OOS.
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
7y
@Jason Gamio. I’ve done this 4 times in memphis and cleveland. I don’t recommend it to most people, but most people on here never really do anything when they’re starting out.
I didn’t want that to be me, so I took “massive action” and bought a house site unseen in another state. I did an inspection and all that, saw photos. It’s pretty standard.
I now own stuff I can drive by and see as well, so it’s nice having both I think.
It's also been mentioned on here that a 20k house is a bad deal. I say you need more information. If it's 20k, rents for 700 and has an ARV of 50k with 10k repairs is it still a bad deal? Don't just assume a 20k house is in a war zone. It often will be but not always. Anything can be a deal at the right price. (Also only deal with this stuff if you're local)
Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes
7y
I've seen hundreds of people from out of state do it in OKC in the last year. If numbers in your market don't make sense and you find a team you can trust, why not?
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
7y
@Jason Gamio I advise going to properties in person. So many out of state investors have gotten themselves in trouble by not visiting properties or understanding the market. You need feet on the ground and they need to be impartial.
My suggesting is fly out for the first couple deals, then after you build trust with an agent, contractor and PM, you can do it remotely.
Rental Property Investor · Lawrence, KS · Member since 2018 · 28 posts · 42 votes
7y
@Jason Gamio I work close to there. My husband grew up in Topeka and we've thought about investing there before. On our first house hack where we live in Lawrence. His standard is its better to stay west of Washburn ave. that's where you can see the prices go up. However, that is just one opinion. I am sure if you get a good agent and start talking to a property management company they can point you in the right direction! Good luck. Feel free to reach out if you have any questions.
Rental Property Investor · Los Angeles, CA · Member since 2016 · 172 posts · 122 votes
7y
@Jason Gamio Both of my properties I have never been to and don't intend to see anytime soon. I live in Los Angeles and I would rather buy a good house in an out of state market, than buy a trash one out here . Always go with a reputable realtor that works with investors, ask around and you will find plenty on these forums. They should steer you in the right direction and tell you which deals are not good to buy, even though they look good on paper. Best of luck!
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
7y
@Jason Gamio It is hard enough purchasing a buy and hold rental at a distance which I have experience with. I could not imagine managing a rehab project at a distance. Even if you get a property manager and/or general contractor to manage the rehab things will come up that you have to deal with. The process is not hands off.
The only way I would ever consider purchasing out of state again is if I have an excellent relationship with whoever was coordinating things for me on the ground.
Before investing OOS you need to do a lot of homework. Need to fly to the area drive it and rate it. This is the only way. Can't just go off of some website or realtor saying its a good area.
I invest in OOS. I live in CA and invest in TX. I have family there and I already know the area and I travel there 4-5x a year. It can be done and the hard work is usually in the beginning.
In your case buying $20k homes. Don't do it. It's trash. There is no value in buying those. Look at it this way. To rehab, a house is $20-25k and you want to buy a $20k house? Think about that.
I think a lot investors that start looking at OOS they see these low price homes and automatically think I can buy 1 or 5 of these rents it for X and I am rich. Woo Hoo! Doesn't work that way. Those are the investors that lose their shirts investing OOS.
I agree with Frank.
Prices are cheap for a reason. I used to buy in D & F areas but not so much - after acquiring over 1,000 apartment units, I focus my attention on B & C areas and on A areas if I can convert an apartment building into a hotel.
D & F are cheap but they do NOT appreciate. They are worth $30K today and even if you put $20K and hold it for 10 years, they will still be worth $30K. But their cashflow is crazy - 33% CCR or better!
Now, having said that - that's a generalization. IF there is indeed a new development that will IMPROVE an area from D to an A, then I will buy that cheap property in a hurry :)