Buying Rentals Out-of-State

11 Replies

Hi All,

Does anyone with experience searching/buying rentals out-of-state have any tips?  Obviously, it can be difficult without being close to the property.  Please leave some thoughts or suggestions!

I work with a number of out of state buyer/partners.  Depending on what your involvement is, I found much better reception when I became their partner.  This put me in a position of "skin in the game".

If you would rather go it alone, you still need to find someone with boots on the ground that can be your Market Expert, as well as helping you put any other parts together for you (i.e., rehab, PM, etc...).

Visiting the State would be nice, but unless you plan on making a week of it (even that isn't enough time), you are much better off with a relationship with someone with "boots on the ground".

If you used a local Realtor, they have the necessary connections and can hook you up for property management, handyman... 

Although I have not tried this, but as a strategy an investor coach has used previously; join your local Rotary club. Once you are in, you will have access to find a trustworthy person in the location's Rotary club where you want to have your rental property who will be able to help you out with the local needs you have regarding collecting rent and renting out the property and fixing broken toilets. He would deposit the rent to your account and rent would be based on the unit number: $650.1, $650.2, $650.3 (The cents represent the unit numbers)

That way you would see right away on your bank account which unit has paid rent and got deposited. unit number 1, unit #2.... 

And of course you would compensate this local trustworthy person who does this for you.

You can also find a local bug exterminator to go out once a month to "spray the unit" even if with water, but this way he would get authorized access to the units once a month, to go around look around while he is spraying and see if there is anything fishy happening (weed growing in the bathtub...) and report it back to you. You would pay for his service what he charges for spraying the bugs.

Once you determine the market(s) in which you have interest, you'll definitely want to find someone local who knows the market.  They can search for properties that will meet your criteria and work for you through the sales transaction.

If you have any friends in the market they may know someone who can help you. Or you can post a message here on BP.

Good luck!

It's all about the team you work with! Since you have to rely on other people to do different parts of the job, those people you find are critical to your property succeeding.

Are you looking for non-local properties for yourself? Being in Iowa, I'd think there'd be plenty nearby.

@Chad Howard  

  agree with the above there is probably absolutely no reason to go out of state I have to imagine you can find plently of nice cAsh flow rentals right were you live ... the rural mid west is full of them and many far better deals than risking the Inner big cities were a lot of the Turn key companies play and that tenant base !

Originally posted by @Chad Howard :

Hi All,

Does anyone with experience searching/buying rentals out-of-state have any tips?  Obviously, it can be difficult without being close to the property.  Please leave some thoughts or suggestions!

 Hi Chad!

What they are all saying is absolutely correct.  Finding that one person who has your back and is trustworthy is CRUCIAL.  So, feel free to press people with difficult questions when "interviewing" them.  Sometimes you happen upon good people, sometimes not.

For example, I've got a realtor and property manager whom I both trust implicitly.  They have steered me away from deals that I thought were good, but found out later that they would have cost me money.  I also have a property manager for a property that absolutely stinks.  His communication level is awful, and he's more trouble than he's worth.

Also, become rather friendly with the bank.  Since they are the one's who'll ultimately decide how far your real estate empire goes, it's a good idea to make sure you've got someone you regularly talk to there, and knows what you're trying to accomplish.  I lucked out on that regard as well, and I only speak to the VP of loans in my area of investing.  

I'm sure that there are people who could recommend people in any particular area you're looking to invest in.  Have you decided which area yet?

Travis

Thanks for all the feedback and suggestions!  I currently live in Chicago, however, am from the Des Moines area so I have plenty of family and friends still in Des Moines.

Growing up in Des Moines and having good connections in the city is the reason I am looking to invest there.  I have a Des Moines family member who is involved with real estate investing and am using him as a mentor/coach.

Like @Jay Hinrichs  said, the inner city deals are tough.  Chicago is an expensive & competitive market and I'm not too familiar with it.  Therefore, I feel like I'm at a major disadvantage in Chicago.

Based on the feedback, it sounds like I should complete my teambuilding and build relationships with partners (banks, etc.).  Can you join out-of-state real estate clubs? Is that beneficial?

@Adrienn Czako  thanks for the tips! Interesting ways to collect rent and to do a "check-up" on the tenants.  I would never imagine a bug exterminator being apart of the team but it sounds like a great idea!

Again, thanks for taking time out of your day to help.

-Chad

@Chad Howard   make sure you work with an experienced and trusting agent. You need to make sure you have a really good property manager as well. Where are you thinking of purchasing? 

@Jerry Padilla  I'm looking in Des Moines.  Preferably the downtown area or west of downtown.

Hopefully am experienced agent and property manager will chime in soon! 

Hi Chad, I don't have any experience investing out of state. Personally, I need the control of at least being able to drive by my properties every so often. I've been active in the central Iowa area for 10 years and have never had any trouble finding deals within an hour of where I live. Depending on what your looking for, the Ames or Marshalltown markets are great (but very different). I have not invested in the DSM area, but have a few friends that do.

Good luck and happy hunting!

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