Hi fellow BP Investors,
First, I want to thank BP. After reading and connecting with fellow BP members. I purchased first out of state rental property.
Through BP, I found HOUSTON area real estate investor friendly agent George Ghiorse who helped us making numerous offers to get this first out of state deal completed.
This property is in Houston Texas and I bought it for $84,000 with 20% down. The house passed appraisal and inspection for a 30 year mortgage. We have to do a lot of repairs and I was able to rent it out for $1175 to a nice family moving in next weekend.
For rehab, We used general contractor Remodel and Model in Houston area. They helped us getting the property ready for rent. They did a great job even though we are not in Houston personally.
I believe that it is very critical to find investor friendly agent for out of state investment. I highly recommend George Ghiorse for purchasing rental properties in Houston area. Without George’s help, I do not think that I can purchase and rehab this rental property.
If I could do it, anyone can.
Looks great. Glad you shared your story @David Jiang
bp is a great place for bringing people together even though they live in different areas of the world.
Hey, congrats David! Do you mind sharing what zip code in Houston, or was this in a surrounding city? How much for rehab, btw?
Yes, that's the Cy-Fair school district - top notch. Thanks for sharing!
Smart move going for a high quality property in an area with good shcools. As an out of state investor you need to minimize the tenant headaches.
Awesome! Thanks for sharing!
What was your timeline like from acquistion to rehab to occupied rental?
@David Jiang ...Nice job! I considered Houston area at one point, but will pursue Dallas in the future..
@Pat S it took us over 4 weeks to closing due to HOA issues and the seller had to fix those HOA issues. After closing, it took about 3 weeks to rehab and get ready for rental. We put the home on the market for a few days to find a qualified family.
@Rolanda Eldridge Dallas is a good city and we considered too. Good Luck.
It is always good to hear these stories!
@David Jiang would you mind messging me your agents contact number?
Congrats! How was the contractor? Did they do good work and were they good at communicating?
@David Jiang , congratulations. I hope you have prescreened your tenants. If you do, you will have real cashflow and real estate investing is actually fun. If not...
@Wendell De Guzman we use a property management company in Houston area to manage the property. The tenants were screened and qualified by property management company.
Not many investors can successfully purchase out of state and project manage a rehab without actually being on the ground.
Good property management will be the key for your success from now and moving forward.
All the best and have a great day.
That's great news David. Could you message me the contact info for Remodel & Model? I'm looking for a bonded/insured GM inside Beltway 8. The area you bought in is right along the "energy corridor" where many major oil companies have offices. If your tenants are in anyway involved in that industry you'll have no problem receiving rent.
@David Jiang congratulations!!
I invest in out-of-state properties as well, and it looks like you found a great deal. Excellent economics for something of this quality/location. I'm pretty sure appreciation is in your future, in addition to the cash flow. Nice job & good luck!
P.S. You're 100% right, finding the right team makes all the difference.
@David Jiang , good. I suggest though that you participate closely in the screening process in your next property. Remember: property management companies are after getting the first month's rent as their leasing fee so they are not as tough in their prescreening process as an owner would. I've been victimized before by a PM company that just put tenants in my 36-unit apartment building but those tenants turned out to be dead beats. I since learned from that tough lesson and I instituted the following screening criteria: (not necessarily in order of importance)
1. No evictions in the past 5 years
2. Gross income has to be 3-4 times the rent
3. majority of the income has to be stable (if most of the income is child support or commissions - I would deny the applicant even if #2 is met)
4. between 2 tenants with similar profiles, I will choose tenant-prospects who have less 30,60, or 90-day lates (based on their credit report)
5. no felony in the past 5 years
6. not a convicted sex offender
7. between 2 tenants with similar profiles, I will choose tenant-prospects who have less unpaid bills & collections (e.g., credit card, medical, etc.)
All of the above can be found if you run a criminal background, rental history & eviction check and credit report. If the property management company does not agree or does not do these checks, I will run in the opposite direction.
Good to hear, make sure to be on top of your management company though. A lot of out-of-staters get burnt with bad management.
@Engelo Rumora @Gunnar Teltow Thank you.
@Austin Moran I just send you Remodel & More contact info through PM.
@Wendell De Guzman You made many good points, thank you. The current property management company has similar screen criteria as you listed. But they did not allow us getting involved in selection of tenants which we do not like. Any suggestion what we can do?
@Andrew Syrios How can we make sure to be on top of management company. They always say this is what we are doing now. They do not wan to what they are doing.
@David Jiang I may be a bit paranoid as I haven't had a good experience with property managers. But in my opinion, first, make sure to interview them extensively and get some references and talk to them too. And Google their company too. Then I would watch your financials very carefully and ask them about any maintenance expenses that seem too high. Make sure they are screening diligently (it's probably even a good idea to ask for the background report of the tenant before they accept).
If possible, it would be good to visit the city and your property too, at least once. And when buying, make sure you aren't being led into a warzone. They can sometimes be deceptive. Use CLRSearch.com to find the crime rates by zip code or City-Data.com to look at the average income by subdivision to make sure it's an OK area.
Don't be afraid to get a bit chippy with them. They should know that you mean business and expect a quality result. And if it comes to it, don't be afraid to switch companies.
Best of luck!
@David Jiang Contratulations on your first deal. I think that the first is always the hardest. All the things you have to learn to make prudent decisions and connections made to get to the finish line. Now that you've done this you KNOW you can repeat. Great Job.
Good job David!
Congratulations! @David Jiang I hope to be right behind you with my first.
Thanks for sharing.
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