Out of state investing, travel/time investment with a job.

6 Replies

Hello BP! I'm new here and have a goal of making my first real estate investment by the end of 2020! Given the market in my area (SF Bay Area) I'm mostly looking at investing out of state.

I work a full time job and was wondering if anyone could share their experience when initially investigating out of state locations/looking at specific properties. Manly in terms of the time management and flying out to the prospective cities.

For example...

How often did you travel to explore prospective neighborhoods?

How did you manage the budget for these trips?

How long do you stay for each trip? Does your job give the affordance to work remotely while on the trip?

Do you try/are you able to group multiple property showings together for a single trip?

etc..

I'm mainly looking to get an idea if the initial lifestyle impact I should expect when diving into out of state investing. I have David Greene's Long-Distance Real Estate Investing book on my reading list as well, but I want to hear what others have to say about their own experiences.

    Hi @Joe DeSimpliciis ! Congrats on making the commitment to get started in 2020! Read DG's book ASAP. It's chocked full of solid info. Think about markets you "know" or are connected to somehow - good friends, where you grew up, went to college, have contacts in that area, where you wouldn't mind taking vacation or trips to. I took a free course Neal Bawa has on how to pick focus markets (for multifamily investing specifically) that was really good: https://www.udemy.com/course/realfocus/

    In terms of trips - there's a lot of vetting you can do of markets online now without hopping on a plane. Once you've narrowed that down to a city you like, then plan the trip. Yes - make sure you account for every hour. See properties, meet with multiple investors in the area, agents, property managers, contractors, etc. Make it super productive! Blitzkreig it. 

    @Joe DeSimpliciis Once you read DG's book it will help some to get over the fear of long distance. DG doesn't go to every property. I have bought a couple 4 plexes and commercial land in another state and have never been there. Find a trusted team in that area that can help. Good agents, PMs, and such and let them be your eyes. If you have family there to take a look even better. Now, however, if I were buying a multi-million property I probably would go there in person at least once before closing. But other than that I don't plan to ever go to those locations unless I happen to be passing through or going nearby anyway so that I can include part of the trip as a business expense.

    Like it says in that book, my eyes aren't any better than the inspector's. It's not likely me seeing it in person will make any difference. Granted pictures can make a junk property look good, but that's why you get others to see it for you. For example, my wife is a Realtor and helps out of state investors. We walk the property and do live video feeds or at least take more pics and video to help those investors "see" the property as if they were visiting it without the need to actually be there. If you find a great agent that can do that for you, then you are off to a good start and saving your time and expense from traveling to every property.

    @Joe DeSimpliciis ; Welcome to Bigger Pockets!  Before I provide answers to your questions, I want to provide a disclaimer that I am not an expert & am only providing my experiences as answering your questions.  Individual results may vary.

    How often did you travel to explore prospective neighborhoods?

    I buy in neighborhoods that I know, & already have resources.  Travel has never been just to look at property. 

    How did you manage the budget for these trips?
    When I do look at property, I am already in the area for another reason.  Property review has always been secondary.  Perhaps I'm visiting, staying for vacation, or a perspective area is in between two points of travel.

    Does your job give the affordance to work remotely while on the trip?

    Yes.

    Do you try/are you able to group multiple property showings together for a single trip?
    Always.  When I am going to view property while I am on vacation, I will sometimes set aside a day to just travel around & look at property.  Generally I have a few in mind, but have also asked the agent for a few recommendations as well.

    Wishing you the best of luck!

    As someone else has already suggested David Green's book, I will follow up with recommending Bigger Pockets episode #301 :
    https://www.youtube.com/watch?v=3OOl59e2WfI

    I agree with @Don Spafford . You have to build your team on the ground. Last year I did 85 SF rentals in Cleveland and Memphis. I saw 10 of them when I travelled to visit the team. I am doing this full time so I could go and checkout them out but that doesn't scale. If you don't have time you may want to consider buying turnkey rentals instead. You get immediate cashflow and property management. For multi-family that is another story. Look for markets that meet your goals. Having friends and family in the market you want to invest should not be a criteria. You can make new friends. :)

    Not sure if this fits the thread but I bought 4 vacant lots in Indiana and have yet to set foot in the state. My case may be a little unusual because I got them for a few hundred dollars, practically nothing when dealing in real estate, but the issues that have come out of it are the area is super low income. I've had to market the properties myself on craigslist and Facebook which doesn't lead to the best leads, but I have managed to get land contracts on all of them.

    Likely everyone on this thread goes for bigger fish but if you're looking at low-risk and slow time frames this is the only thing I know. Curious to know if anyone else deals with things like this?

    I do multifamily from a distance, and it requires a lot of travel to learn markets and look at properties. This is totally separate from the W2, so you can imagine that it's difficult to squeeze things in. If you're dedicated, it can be made to work. If you're an extremely busy high income earner, it just might not be an option to build a portfolio for yourself remotely. I think other options like turnkeys, syndications, and funds can be preferable options for most busy professionals.

    The budget is basically to economize everything possible. Stay in Airbnbs, take the cheap flights, and don't eat at fancy restaurants. If you make a good plan you can learn a lot about a market in two days. Much of the work is done ahead of time, figuring out exactly where you need to go and what you're looking for.