OOS investing as a newbie investor?

Question

Good afternoon BP,

Has anyone as a newbie ever invested OOS whether with buy and hold investments, BRRRR or any other strategies? How did you feel before and after you had your systems in place for you (such as your core 4)?

Nicole Benton · Answer

Hi Joaquin,

My husband and I are new investors and just finished our first out of state fix and flip. We live in the suburbs of Seattle, WA so we wanted to start investing out of state because of the lower price points of some markets. At first we were pretty nervous to take the leap. After lots of research, we started networking with other investors in the area to try and gain more knowledge of the market and best areas to invest. Through networking and referrals, we built our team, which consisted of an agent, lender, and contractor. Each one of our team members were investors themselves so they were able to better understand our mindset and our expectations on the project. They helped guide us throughout the whole process and were absolutely critical to our success. It was quite a learning curve and was challenging at times, but overall we really enjoyed the process and will definitely be doing more out of state investments in the future.

Joaquin M Dugan Jr · Answer

@Nicole Benton thank you for sharing your story. In a sense, I was and am in the same boat being in a market that I am unable to finance on my own. Where did you find your network connections. Were they through BP, Craigslist, referrals from others you knew or other ways?

Joaquin M Dugan Jr · Answer

@Nicole Benton I would think so. Anything new would have a tad bit of uncertainty, doubt and uneasiness, but it all worked out for you both and congratulations once again. Soon, I hope to follow suit, similar to you and exciters to get started

Nicole Benton · Answer

@Joaquin M Dugan Jr I think the most challenging part for us was making our first offer. It was easy just to keep analyzing deals, but actually pulling the trigger and putting some offers in was a little nerve wracking at first.

Joaquin M Dugan Jr · Answer

@Nicole Benton That is awesome and validated why I upgraded my BP account to network even more and to connect with those such investors who are also lenders, agents, etc. In your opinion, what do you believe your biggest struggle for you both?

Nicole Benton · Answer

@Joaquin M Dugan Jr We found all of our team members through BP and referrals. We originally reached out to investors local to the market we invested in through BP to network and get their take on the market. Multiple of the investors we spoke with referred us to the same lender, who we ended up using. Our lender was an investor himself and referred us to a realtor who specialized in working with investors. And then we found our contractor through BP.

Lane Kawaoka · Answer

A turnkey is a great way to learn how to manage remotely without taking a chance on BRRR.

Check out my article about the Cons of BRRR.

https://www.biggerpockets.com/...

Note this is coming from an Accredited investors POV who used to do turnkey rentals.

I personally would not do Remote BRRR as there is just a lot of risk with 1) risk of embezzlement with contractors 2) change orders and 3) bank doing bait and switch doing a lower appraisal and/or LTV on the refinance.

Johnny Wolff · Answer

Hi @Joaquin M Dugan Jr,

I invested OOS for my first few properties.  It went well.  I think as long as the turnkey company also manages the property you should be in pretty good shape.  I personally think you can get a pretty good understanding of an area by pursuing Google maps (check out the cars) vs taking a trip in person - but understanding the area a bit is helpful.

Jonathan Greene · Answer

It can be done the way @Nicole Benton did it, but you have to realize that so many of these go awry and end up in bad spots because of the management from OOS. It sounds like they were detailed and long in picking a team and networking which is great, but I always suggest taking 3-5 days in the area you want to invest (post-COVID) to learn the streets and meet the team so you have your bearings. Even if you make it out ok on an OOS flip, if you've never been there and never met the people on your team in person, you are losing money somewhere.

OOS investing as a newbie investor?

Most Popular Reply