Out of state investing

13 Replies

Hey everyone my name is Luke and I am just getting into real estate investing. I'm still learning and trying to do as much research as possible.

I currently go to school in Utah but I am looking to invest in Tennessee where I know there is a great market. Being new, I could use any and all advice or tips about out of state investing and specifically how to find a great real estate agent in the market your investing in.

Thanks for the help!!

Hey @Luke Nafrada I was in similar shoes to you a few years ago. I would reach out to people in the specific market for connections/referrals. Work on building your team first (to get more comfortable and build a pipeline). Realtor/wholesalers, PM and contractor are the main ones to start with.

Welcome @Luke Nafrada

Out of state BRRRR is a great way to get started in real estate for low to no money down if you find the right deals. It's how I got started, but I've since transitioned to 100+ unit apartment buildings.

My advice: locate and select your market FIRST. Tennessee is a big state, narrow that down by looking for cities with population growth, job growth, industry diversity, high occupancy and lower crime.

Once you select a market, build your team:

1) Wholesellers and real estate agents

2) Property Management

3) Contractors

4) Lenders

I would also advise finding a good mentor, even if you have to pay for it. I had one starting out and he saved me thousands of dollars and countless time off my learning curve getting started. I good mentor will save you 10x what their program costs.

@Luke Nafrada What attracted you to Tennessee?

I went straight to out of state investing and would echo some of the thoughts above.  For some more actionable steps here are a few things that I've found that have proven somewhat successful.

(1) Narrow down your search to a few specific neighborhoods/zip codes.

(2) Fly out to the market and walk the streets in the neighborhood (don't drive, walk).  It's important to know which streets are where, how they *feel*, the cars that are on the street/in the driveway, and where the invisible lines are (other side of the track stuff).  You won't know this from Google Maps.

(3) Meet your team in person.  Pay for lunch, coffee, etc.  This helps build the relationship and shows that you are serious and not a tire kicker.  

(4) Depending on the quality of the tax assessors website where you want to invest, get to know it.  If it is online, there is usually a TON of information on it.  

(5) Check the MLS/listings fairly regularly to get a sense of pricing, etc.

Good luck.

Luke, many good sugestions here. Easy one that is always over looked. Read the local paper! Once you narrow down the city, town and neighborhood. The local news is a wealth of information. New employer moving to the area? New school being built? Crime rate? Any and all construction projections to take note of. Great, easy way to self educated, when you don't live in the area. Best of luck!

@Marlen Weber great question! I’m actually originally from TN and that’s the market that I know the best, specifically the middle Tennessee, Manchester and Tullahoma areas. Currently I’m a construction management student at BYU in Utah but since I know certain areas in TN well, and even have a couple contacts, I am considering out of state investing as an option to start out

@David Barnett these are great steps!! I really appreciate this advice. I know that out of state investing has its many challenges and jumping straight into it out of the gate definitely isn’t the easiest route to take, so thanks for your help!

As for why TN, I mentioned to the comment above but that is where I am originally from and the market that I know best. I also have family and a few (though very limited) ties to REI in the middle TN area so that's why I feel it's a good area for me to begin investing in.

Hi @Luke Nafrada

Out of state investing comes with a lot of opportunities but also lots of challenges, one of the biggest of which is building a reliable team. Have you considered working with a full-service turn-key provider?

Turn-key providers can often simplify the process for OOS investors, since they come with an established team. If you do go this route, you'll want to find a turn-key provider that already has a relationship with a property manager, since the success of your investment often depends upon the quality of the PM.

Good luck on your real estate investing journey!

Lindsay