Long distance investing/ Building a team

26 Replies

Hello, bigger pockets world! Hope everyone is doing well and all your families are healthy during these unprecedented times. 

Furthermore, I am a new investor looking to invest out of state in areas like Texas, North Carolina, and Florida; and possibly locally in New york! In addition, I was hoping to get some feedback from experienced long-distance investors on how to analyze and find deals and some tips /Due Diligence to be aware of when searching for properties and possibly some situations to look out for!

Also, what's the best way to approach building a long-distance team. I know lenders, mortgage brokers, and agents become skeptical when it comes to out-of-state investors, so I was hoping you guys could some tips on how to gain their trust and what's the best possible way to get the most out of them.

I have started to look at properties and write down all the brokers and give them calls... But anything helps!

Any comments, feedback, and/or ideas are welcomed!

Thanks again guys and I hope everyone has a healthy and fantastic thanksgiving!

Please feel free to message me as well! would love to get to know people on the website


Thanks again, guys!

Hi @Joe Gallo !

I am a new investor as well so I am not the most experienced. However, my first deal was an out of state, turnkey property. I felt like turnkey was a good route for me as I work full-time outside of real estate. My post below is a review of my experience obtaining my first rental.

Let me know if you have any more questions about my experience or if I can help in any other way!

Good luck on your journey!

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

Originally posted by @Joseph Schweizer :

Hi @Joe Gallo!

I am a new investor as well so I am not the most experienced. However, my first deal was an out of state, turnkey property. I felt like turnkey was a good route for me as I work full-time outside of real estate. My post below is a review of my experience obtaining my first rental.

Let me know if you have any more questions about my experience or if I can help in any other way!

Good luck on your journey!

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

 Hi, joe! thank you for taking the time to asnwer! I will deff check out your blog post and come up with some questions. I will send you a connect and PM!

Is this the post for "Joes"?  

I'm not an expert on building teams, but I can tell you my thoughts based on what has worked recently for me.  This was not planned, but I can see how this could be a good process to follow.

Someone on BP reached out to me based on a comment I made on the forums. They wanted to pick my brain on some STR items and we connected and spoke. We hit it off and stayed in touch. (Im in NC and he's in CA by the way). He was interested in doing a deal in NC and get into STR. We would send each other deals we found on MLS and just talk through them. I already have property in Western NC so I was telling him my thoughts.

Fast forward to today, we are closing on a deal together here in NC.  Without using this forum to get into every detail, the basis of him getting an OOS deal was to find someone local where he wanted to invest and use the team I have built (realtor, cleaner, maintenance, etc.)  

I'd say a great first step even before analyzing deals is to connect with someone who is in an area you're interested in and ask to team up with them.  If they've had success there, you should likely have it as well if they know what they're doing.

I'm now in the process of working another deal where I'm using him in CA as my boots on the ground and his respurces to get property out there. 

If you don't make a connection, you are essentially building your own team from scratch in a state where you have no presence.  Hope this helps!

Let me know if you are interested in pursuing any NC stuff and I'll help where I can.

@Joe Gallo -I believe David Green's book "Long Distance Real Estate Investing" would help you tremendously. Even though when I started investing in long distance properties that book didn't exist but I have read it this year-it is good for folks who are looking for out of state investment. My assumption is that most of the time investors go out of state to buy rentals is for better cash flow. At least that was the main reason for me. Some cities provide much better than others with cash flow & cash on cash return. If you are looking to invest out of state-it is best you connect with a local real estate agent who happens to be investor friendly, through him/her you will be able to get a list of banks (call around as well to find out banks that are willing to work with you), contractors, property management & inspection companies etc. info.

There are plenty of resources to help you connect with team members (agents, lenders, pms, etc). But one crucial thing to keep in mind before you invest anywhere out of state, get familiar with the market. Every market has a good and bad areas to invest. Don't invest blindly by just looking at some numbers on a spreadsheet. Hope this helps.

Building your core four and the overall team is crucial to succeeding in oos investing. I would suggest finding a realtor who knows how to work with investors and all the different strategies to start out. They will help you to learn the market with the goal in mind to get set up with other team members. @Joe Gallo

Originally posted by @Toby Khan :

@Joe Gallo-I believe David Green's book "Long Distance Real Estate Investing" would help you tremendously. Even though when I started investing in long distance properties that book didn't exist but I have read it this year-it is good for folks who are looking for out of state investment. My assumption is that most of the time investors go out of state to buy rentals is for better cash flow. At least that was the main reason for me. Some cities provide much better than others with cash flow & cash on cash return. If you are looking to invest out of state-it is best you connect with a local real estate agent who happens to be investor friendly, through him/her you will be able to get a list of banks (call around as well to find out banks that are willing to work with you), contractors, property management & inspection companies etc. info.

 @tobykhan I heard about the book through the podcast and from research on books. I will deff shoot you a PM and ask you a few questions about how you got started with Out of state! Thank you for taking the time out to respond, much appreciated!

Originally posted by @Joseph Bafia :

Is this the post for "Joes"?  

I'm not an expert on building teams, but I can tell you my thoughts based on what has worked recently for me.  This was not planned, but I can see how this could be a good process to follow.

Someone on BP reached out to me based on a comment I made on the forums. They wanted to pick my brain on some STR items and we connected and spoke. We hit it off and stayed in touch. (Im in NC and he's in CA by the way). He was interested in doing a deal in NC and get into STR. We would send each other deals we found on MLS and just talk through them. I already have property in Western NC so I was telling him my thoughts.

Fast forward to today, we are closing on a deal together here in NC.  Without using this forum to get into every detail, the basis of him getting an OOS deal was to find someone local where he wanted to invest and use the team I have built (realtor, cleaner, maintenance, etc.)  

I'd say a great first step even before analyzing deals is to connect with someone who is in an area you're interested in and ask to team up with them.  If they've had success there, you should likely have it as well if they know what they're doing.

I'm now in the process of working another deal where I'm using him in CA as my boots on the ground and his respurces to get property out there. 

If you don't make a connection, you are essentially building your own team from scratch in a state where you have no presence.  Hope this helps!

Let me know if you are interested in pursuing any NC stuff and I'll help where I can.

This is the famous Joe's Post! and thank you for taking the time out to give your personal experience and respond to the forum! I will def shoot you a PM with questions regarding your experience and how you got started with out-of-state investing!

 

@Joe Gallo usually one person exclusively focused on investing can either build your team for you,

Or give you 2-3 options for vendors and you can build your own team.

The two keys in my opinion are agent and property manager. Some property management companies have agents on their team that are investor friendly agents.

As far as attorneys, lenders, home inspectors, insurance brokers, etc.. I think they are easier to find, most have similar rates, and as long as they are legit their services are usually similar.

Agents and PM’s are an entirely different story. Every agent will sell you a house, very few will have systems built specifically for investors, and even less will have systems built for out of state investors.

Then there are property managers. There are fantastic well established companies that are really expensive and cater to larger investors and have too much over head for smaller, portfolio building investors and end up taking too much for maintenance repairs and CapEx, and there are literally one man property management companies that charge next to nothing but, are not really equipped to handle property management properly or safely.

For investors looking to start with a double and build a portfolio usually somewhere in between is the place to start.

You should be most careful of the fly by night managers. They will save you a lot of money up front. Then you will find out the work is shoddy. Tenants stop paying because they were not screened properly, and your risks go way up. If work is not done to code and someone gets hurt,

Or if an uninsured person gets hurt on your property on behalf of your manager, you can be left holding the bill and all the liability.

In short, one investor friendly agent should be able to build a reputable team for you in 3-5 phone calls and have the right vendors lined up to match your goals.

@Joe Gallo

Hello Joe. I am in Tampa area and have successfully assisted out of state buyers preview and purchase homes, most recently a buyer from California purchase an investment home in Pinellas County. I own several investment properties myself and have a great set of vendors that I trust including electricians, plumbers, contractors, pest control, etc. that I trust. I tour the homes and provide video and assessments and analysis of comparables. I then coordinate the inspection and babysit the closing process. It works really well having local boots on the ground to locate quality properties in good areas and then assist with the purchase process. Let me know what you’re looking for!

Logically, find a good Realtor, an unbiased Inspector and an even better PMC.

They are all critical to finding a solid rental property with good returns and keeping it that way. They should also be a good "check & balance" for each other. 

We've worked with Realtors that were trying to sell investors crappy properties we didn't want the headaches of managing. If everyone has a team mentality, open & frank discussions about properties should be possible and lead to an investor acquiring a good investment. We do have Realtors we work well with and refer investors to, but an investor shouldn't necessarily accept such a referral blindly. While we like to think we're one of the "good guys" you can trust, we've taken over rentals that a slimy Realtor and PMC screwed an investor with. So, be sure to do your due diligence on both!

Inspectors are the last, but not least of your "Tripod Team" of support. Try to find one via your own search. Having your Realtor or PMC refer you to one may be easier, but how much can you trust them to honestly assess a potential purchase and not be pressured by the Realtor that found the deal? You want an inspector to tell you everything wrong with a potential purchase, so you don't get ugly & expensive surprises. 

An example of what can happen when your "Tripod Team" doesn't exist or work together: we had an existing client go out on their own and buy another rental. They looked online and bought it through the listing agent, representing only the seller. The client found their own inspector, but didn't get us involved until after they bought the property. After going through the property, we sent our client a $20k RentReady bid with supporting video, to be able to get the rent amount the client wanted. The client was shocked and furious! Without going through all the tribulations, the problem was that the house hadn't been update in at least 40 years. The Realtor that sold it to them was legally required to only look out for the seller's interests, so didn't tell them. The Inspector did their job, which was to only point out structural problems and such with the property. Our client failed to involve us, as their PMC, to get our feedback on what the property would rent for as-is, and what it would take to RentReady it to get market rent. Hope this example shows why your Tripod Team needs to work together on your behalf!

Anyways, once you vett out your main tripod team, they should be able to refer you to lenders, attorneys, insurance agents and even tax professionals. All these team members have less of an impact on your success, so going with a referral has a lot lower risk associated with them. You should still screen them though, for their knowledge, performance and how they will mesh with you and your team.

DM us if you'd like to discuss investing in the Detroit market:)

Hello,

@Joe Gallo just wanted to reach out as I am in Jacksonville, FL and in a good market.

I am a boots on the ground type of guy and I am interested in working with you if you feel I could be of some help let me know.

Will, 

I'm in California purchasing houses in Kansas. I reached out to an agent and she got me set up with an MLS portal. After a day or two, I sent her a spreadsheet with all of the houses I had analyzed and showed her how serious I was. She told me she was skeptical until she saw the level of analysis and how much time I had spent thinking about what it was I really wanted.

All that being said, if you are a long distance investor, you can do a lot to impress the team you are trying to assemble by showing them how serious you are and your level of commitment. I used the same lender as my primary residence and got a referral from my local agent. The agent in Kansas was more than happy to take me on and took me serious based on my prior experience with the company. After putting in four offers, I was able to purchase my first rental sight unseen. My PM sent me a message earlier this week letting me know we were under contract with a tenant.

Good luck building your team, BP gives you all of the tools you need to make it happen.

Originally posted by @Joe Gallo :

Hello, bigger pockets world! Hope everyone is doing well and all your families are healthy during these unprecedented times. 

Furthermore, I am a new investor looking to invest out of state in areas like Texas, North Carolina, and Florida; and possibly locally in New york! In addition, I was hoping to get some feedback from experienced long-distance investors on how to analyze and find deals and some tips /Due Diligence to be aware of when searching for properties and possibly some situations to look out for!

Also, what's the best way to approach building a long-distance team. I know lenders, mortgage brokers, and agents become skeptical when it comes to out-of-state investors, so I was hoping you guys could some tips on how to gain their trust and what's the best possible way to get the most out of them.

I have started to look at properties and write down all the brokers and give them calls... But anything helps!

Any comments, feedback, and/or ideas are welcomed!

Thanks again guys and I hope everyone has a healthy and fantastic thanksgiving!

Please feel free to message me as well! would love to get to know people on the website


Thanks again, guys!

Happy to help build out your team in Kansas City. Read David Greene's book on out of state investing. It is a good starter (or restart) book. Having an agent, PM, and lender is key.

@Joseph Schweizer Hi, I’m new into this world and am just getting started with figuring out where to invest in my first property. I just learned about turnkey properties from a podcast I listened to. Can you tell me a little about your experience and if the cash flow is right? How much are you getting charged for property management?

@Mark Stark please let me know if your bank can loan outside Colorado and to an investor who doesn’t live in Colorado. So far I haven’t found a bank that’ll take that route. It led me to call local banks in the area where the property is to attain the loan as out of state investor. Thanks in advance. I’m a bit curious to see your response.

After identifying my market, I flew out and started meeting with different REA's, contractors  and property managers. Now I have a solid team in place.