Long Distance Investing

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Long Distance Investing

Stephanie Barthelemy
Investor · Baltimore, MD · Member since 2020 · 23 posts · 15 votes

Hello Bigger Pockets world!  My wife and I are new to investing, and we are looking to invest long distance in Baltimore, MD.  We are looking for advice for long distance investing from experienced investors, any guidance would be appreciated.

Thank you in advance!

Greg Barthelmy

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Stone Jin
Rental Property Investor · Chandler AZ and Sylvania, OH · Member since 2009 · 708 posts · 561 votes
5y

@Stephanie Barthelemy

We live in Phoenix and invest in Ohio.  Make sure you have solid boots on the ground, a good realtor and network with local investors.  We actually self manage the majority of our portfolio from 2300 miles away.  I can collect a check and call the plumber just as well as a PM.  The boots on the ground fill in the pieces where I can't perform remotely such as unlock a door or collect a lock box.

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  • Magnus Göransson
    Specialist · Gothenburg, Västra Götalands län · Member since 2016 · 26 posts · 33 votes
    5y

    @Stephanie Barthelemy

    Hello Stephanie!

    My name is Magnus and im from Sweden.

    When i bought my first condo in 2015 it was in

    Las Vegas. Pretty far from Sweden.

    The agent i was buying from.

    I was anylising how she was, and if she was trusty, and also if she really wanted to make both of us happy with the deal.

    She was and i was buying 6 more condos of her without no fear at all. It was only exciting.

    If you buy from a agent you dont really trust, you should listen to that and not proceed.

    This is what i think is the most important thing.

    Then the other thing is to make sure she is working with a solid property manager that is balanced and also hopefully is balance over years to come.

    Good luck!

    3Reply
  • Account Closed
    Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
    5y

    I invest in OH long distance. It’s pretty easy. Lots of good people in OH to work with.

    2Reply
  • Stone Saathoff
    Investor · San Antonio, TX · Member since 2019 · 576 posts · 307 votes
    5y

    Wow, to me I think it would take some serious courage to invest in rural Montana remotely. Props to you and glad it's working out well.

    As others have mentioned, having the right team is everything. Starting with a realtor or PM and repairmen. Coming by in person to meet these folks would also have a great impact and likely keep you top of mind.

    0Reply
  • Richard Libutti
    Rental Property Investor / Director of Business Development · Miami, FL · Member since 2018 · 45 posts · 21 votes
    5y

    @Stephanie Barthelemy

    Not trying to discourage you, as investing from afar can be done, but would be better suited to help with insight as to what your goals are.

    I generally advise against investing from afar because for me, real estate is hands on in so many ways.However, I do have several friends that are successful investing remotely...

    1Reply
  • Stone Jin
    Rental Property Investor · Chandler AZ and Sylvania, OH · Member since 2009 · 708 posts · 561 votes
    5y

    @Dan Gustavson 

    We focus on the Toledo market.  I would stay away from anything that can't generate $1500 a month rent.  After years on BP, I've heard many "we bought in the wrong neighborhood stories" but I haven't come across too many we bought in a good school district with decent tenant class and are still struggling to make money stories.  On paper the guy spending 30K to buy a house that rents for $750 is beating me, but I would wager at the end of a 5 year period, we'd come out pretty close.

    @Andrew Rosenberg

    Though we mainly look at Sylvania, we also own in Maumee, Toledo and I have offers out in a few other suburbs.  The actual suburb doesn't matter as long as there is demand for quality homes.

    2Reply
  • Stone Jin
    Rental Property Investor · Chandler AZ and Sylvania, OH · Member since 2009 · 708 posts · 561 votes
    5y

    @Eli Crognale 

    It really depends on what you are after.  Currently, I'm after cashflow so Ohio makes a lot more sense than Phoenix.  I have roots in Toledo so I rely on them heavily.  Phoenix now is an appreciation play and we still have a significant portfolio that is appreciating nicely.  

    To give an example.  Currently I would say to get $1600 dollars in rent, in Phoenix I'd have to buy a house about 250K, in Ohio for the same $1600, I recently did one where I was all in at 150K.  Taxes are little higher in Ohio, but the returns are still quite a bit better. 

    If you are trying to grow net worth, then that is a whole different discussion.

    3Reply
  • Connor Stark
    Real Estate Agent · Los Angeles · Member since 2019 · 57 posts · 40 votes
    5y

    To reiterate what a lot of others have said. I think the most important thing is to build a team that you can really trust within your target market. My partners and I acquired our first 27 unit in PHX. We visited the city multiple times prior and set up as many meetings as we could in our allotted time to meet with property managers, contractors, agents etc. We're working on building an efficient team that works as its own system of checks & balances. The goal is to bring a lot of business to all parties involved so if this is portrayed to them hopefully they feel very incentivized as well.  

    1Reply
  • Eli Crognale
    New to Real Estate · Member since 2020 · 19 posts · 9 votes
    5y
    Originally posted by @Zeke Liston:
    Originally posted by @Eli Crognale:
    Originally posted by @Stone Jin:

    We live in Phoenix and invest in Ohio.  Make sure you have solid boots on the ground, a good realtor and network with local investors.  We actually self manage the majority of our portfolio from 2300 miles away.  I can collect a check and call the plumber just as well as a PM.  The boots on the ground fill in the pieces where I can't perform remotely such as unlock a door or collect a lock box.

    I am living in Columbus,Ohio and looking to invest long distance in Phoenix actually. Is there a reason you are choosing to invest outside of phoenix? I know Ohio can have great investment opportunity, especially where I Iive, but Phoenix does as well.

    Hi Eli, I'm curious as to why you're investing outside of Columbus?  

    I have a brother who is a real estate agent in Phoenix and I plan on moving out there in a few years. I don’t plan on settling on Columbus as I grow older. 

    I have another brother who currently has 2 great multifamilies in Columbus but I’m choosing Phoenix for the long term. 

    2Reply
  • Eli Crognale
    New to Real Estate · Member since 2020 · 19 posts · 9 votes
    5y
    Originally posted by @Stone Jin:

    @Eli Crognale 

    It really depends on what you are after.  Currently, I'm after cashflow so Ohio makes a lot more sense than Phoenix.  I have roots in Toledo so I rely on them heavily.  Phoenix now is an appreciation play and we still have a significant portfolio that is appreciating nicely.  

    To give an example.  Currently I would say to get $1600 dollars in rent, in Phoenix I'd have to buy a house about 250K, in Ohio for the same $1600, I recently did one where I was all in at 150K.  Taxes are little higher in Ohio, but the returns are still quite a bit better. 

    If you are trying to grow net worth, then that is a whole different discussion.

    Yeah that makes a lot of sense. I am not horribly concerned with the cash flow at the moment as I have another job providing income. Thank you for the input tho this was helpful! 

    0Reply
  • Zeke ListonBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    5y
    Originally posted by @Eli Crognale:
    Originally posted by @Zeke Liston:
    Originally posted by @Eli Crognale:
    Originally posted by @Stone Jin:

    We live in Phoenix and invest in Ohio.  Make sure you have solid boots on the ground, a good realtor and network with local investors.  We actually self manage the majority of our portfolio from 2300 miles away.  I can collect a check and call the plumber just as well as a PM.  The boots on the ground fill in the pieces where I can't perform remotely such as unlock a door or collect a lock box.

    I am living in Columbus,Ohio and looking to invest long distance in Phoenix actually. Is there a reason you are choosing to invest outside of phoenix? I know Ohio can have great investment opportunity, especially where I Iive, but Phoenix does as well.

    Hi Eli, I'm curious as to why you're investing outside of Columbus?  

    I have a brother who is a real estate agent in Phoenix and I plan on moving out there in a few years. I don’t plan on settling on Columbus as I grow older. 

    I have another brother who currently has 2 great multifamilies in Columbus but I’m choosing Phoenix for the long term. 

     Oh I understand. You should take advantage of an owner-occupant loan while you're here and sell before you move. 

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    1Reply
  • Account Closed
    Member since 2019 · 1k+ posts · 1k+ votes
    5y

    @Stephanie Barthelemy

    What is your motivation for targeting long distance?

    1Reply
  • Larry RegasPro Member
    Member since 2020 · 1 post · 0 votes
    5y

    I am new to real estate investing. My wife and I are currently starting to poke around and look for 5-20 unit multi-family properties in OH and AZ. We live in the SF Bay Area so we need to look elsewhere to invest as it is too expensive here. What other cities should I be looking into for cash flowing apartments?  

    0Reply
  • Taylor L.
    Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    5y
    Originally posted by @Larry Regas:

    I am new to real estate investing. My wife and I are currently starting to poke around and look for 5-20 unit multi-family properties in OH and AZ. We live in the SF Bay Area so we need to look elsewhere to invest as it is too expensive here. What other cities should I be looking into for cash flowing apartments?  

    Dig deeper in the areas you're already looking. OH & AZ both have great markets to invest in, and 5-20 unit deals are going to require connections with brokers who have deal flow, and those come with time and work. 

    1Reply
  • Hanna M.
    Member since 2018 · 22 posts · 20 votes
    5y

    Why Baltimore? I ask because I live in the DMV and am familiar with the Baltimore market. I work in real estate. I wouldn't touch Baltimore with a ten foot pole, honestly. I now invest long-distance in the Southern US instead of Baltimore or DC even though obviously investing locally would be logistically easier. The landlord/tenant laws in Baltimore and DC are an absolute nightmare and only getting worse since Covid. People are also flocking out of cities during the pandemic, making rents shoot down in the short term. In order to cashflow in Baltimore you're mostly looking at C/D properties with neighborhoods you wouldn't want to get out of your car in (just trust me on this). Really wondering why you chose that market.

    1Reply
  • Sam Gallahan
    Real Estate Broker · Baltimore, MD · Member since 2020 · 2 posts · 0 votes
    5y

    @Stephanie Barthelemy

    0Reply
  • Justin Reed
    Wholesaler · Member since 2020 · 140 posts · 89 votes
    5y

    @Stephanie Barthelemy

    Check out wholesaling and direct mail. You can buy and sell anywhere without visiting. It works for land and houses.

    I'm direct mail acquisition machine. I pull assessor data (with a direct link) of the type of properties in the areas I want and send ALL the property owners an offer. I scrub the list to remove things like properties with a mortgage, duplicates, etc. and spend a tremendous amount of time on pricing, because although these offers may be a lot less than retail, they are not out of the question. I explain in my offer letter to sellers that I am a serious investor, not and agent/broker, I pay cash, and are prepared to close as soon as x days.

    Then I sit back and wait for the motivated sellers to call us. You can of course edit this model to fit how exactly you plan on purchasing and what specific property type you are looking for. Believe me - it works like a charm. That is how I GET THERE FIRST. By the time a deal reaches the MLS or a lead source, someone else has already beat you to it. Also, knocking on doors (aka "driving for dollars") is an outdated way of doing this and honestly isn't worth your time. It's no longer about possible subject to leads - we now have DATA and computers and direct mail to get there first. Please feel free to reach out to me if you have any additional questions - I would love to help!

    0Reply
  • Eli Crognale
    New to Real Estate · Member since 2020 · 19 posts · 9 votes
    5y

    @Zeke Liston I totally would if I wasn't playing professional soccer in Birmingham. Im bouncing around too much to settle in the property in Columbus. thanks for the advice tho!

    0Reply
  • Stephanie Barthelemy
    OP
    Investor · Baltimore, MD · Member since 2020 · 23 posts · 15 votes
    5y
    Originally posted by @Account Closed:

    @Stephanie Barthelemy

    What is your motivation for targeting long distance?

    We live in NYC and it's just way to expensive for us to get in the game here. It's not at all landlord friendly. A triplex here is literally 10x more than in other places - namely Baltimore.

    0Reply
  • Stephanie Barthelemy
    OP
    Investor · Baltimore, MD · Member since 2020 · 23 posts · 15 votes
    5y
    Originally posted by @Hanna M.:

    Why Baltimore? I ask because I live in the DMV and am familiar with the Baltimore market. I work in real estate. I wouldn't touch Baltimore with a ten foot pole, honestly. I now invest long-distance in the Southern US instead of Baltimore or DC even though obviously investing locally would be logistically easier. The landlord/tenant laws in Baltimore and DC are an absolute nightmare and only getting worse since Covid. People are also flocking out of cities during the pandemic, making rents shoot down in the short term. In order to cashflow in Baltimore you're mostly looking at C/D properties with neighborhoods you wouldn't want to get out of your car in (just trust me on this). Really wondering why you chose that market.

     Hi Hanna,

    We're open to other places. We just have been there a lot and got pretty familiar. We met some great, knowledgeable realtors who know the market and we can see a strategy there. Plus it's not that far from were we are in Brooklyn, NY.

    0Reply
  • Account Closed
    Member since 2019 · 1k+ posts · 1k+ votes
    5y

    @Stephanie Barthelemy

    That’s fair. You’d be surprised the number of people who want to shop long distance because they read it worked good in a book.. even though they may be in the absolute ideal market for their chosen asset class.

    0Reply
  • Stephanie Barthelemy
    OP
    Investor · Baltimore, MD · Member since 2020 · 23 posts · 15 votes
    5y

    @Magnus Göransson Wow! Congrats on the super long distance investing. I hope that's going well. 

    This is great advice! Thank you!

    We do have a very trustworthy realtor. We scrutinized and interviewed and tested him a lot. We have met with him several times. We trust him.

    0Reply
  • Stephanie Barthelemy
    OP
    Investor · Baltimore, MD · Member since 2020 · 23 posts · 15 votes
    5y

    @Justin Reed You really know your stuff! Thanks for the advice. Have you done this in Baltimore? If so, what were your results?

    0Reply
  • Peter Philando
    Rental Property Investor · Hollywood, FL · Member since 2015 · 156 posts · 93 votes
    5y

    I live in the Miami/Ft Lauderdale area and invest in Montgomery, AL. I was up one night and just bought a cheap house on HUBZU one night in a state I never visited before. However, I have made several trips there, driven all over the city .... good areas, bad areas, so-so areas. I found BiggerPockets after the purchase and it has helped me to navigate my way. The one thing I can say is to visit the area you want to invest in, if you can. While there drive around, schedule meetings with potential team members, visit the Home Depot in the morning to meet potential contractors, etc. I bought a map of the city and used it while I drove around .... now that map hangs over my desk. I know you can make it without visiting but it's well worth your time. 

    As others have said, you need to figure out your strategy. Montgomery is not an appreciating market but great cashflow. So my number one focus is cashflow, therefore I set a specific goal based on cashflow. I need 30 properties cash flowing no less than $300/month to passively make $100K/year. I don't calculate cap rate, COC, etc. I also want equity so I can BRRRR if desired, therefore I need to put in more effort to find deals that would give equity and good cash flow. I'm now at the point where I looking into flipping in this market. I started out with property managers but have moved to self manage, except for one house. I have solid boots on the ground where they help with showing properties for rent. I have a great investor friend that I bought 2 houses from and we talk at least once per week. I'm heading there in a few days to finish up a rehab. Now, I feel so confident I can do this anywhere. So, visit and know your market, meet people, use property managers if unsure then you can take over property after a year, make offers, get addicted .... BUT GET START!

    4Reply
  • Nick Calamia
    Realtor · Phoenix, AZ · Member since 2018 · 30 posts · 38 votes
    5y

    @Stephanie Barthelemy I would advise getting a solid property manager! That will make or break your investment. It could be the reason why you don't cashflow with dozens of headaches, non responsive texts back, even severe stress! A good property manager will make the investment as passive as possible for you which I am sure is the goal for you guys! I would also suggest contacting property managers ahead of the purchase because it will tell you a lot about the quality of tenants you can expect for the area if property managers are turning down to manage the property!!

    2Reply
  • Cheryl Vargas
    Rental Property Investor · Rohnert Park, CA · Member since 2014 · 306 posts · 160 votes
    5y

    @Peter Philando

    Peter

    Sounds like you have had great success investing long distance. Why did you choose to invest so far away from where you live, rather than in Orlando, which is growing like crazy?

    Also, how do you vet your tenants in addition to doing the employment check and background checks? Do you take a trip to AL to meet them in person before giving them a lease?

    Thanks!

    0Reply
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