Here's something I don't understand, especially since I had the choice of choosing any place in the country to set up my business and chose Atlanta.
So many people here on BP talk about investing out of state and in other countries. I've been there and done that, but let me tell you that when it comes to rehabs and flips, it's really and truly a hands on business. Not only that, when I worked out of Ireland travelling to places like Shanghai and South East Asia to do deals I realized after a year clocking over 300,000 air miles (about 20 weeks of physical travelling between airport time and actual flying) that this was a unique form of lunacy, regardless of the profitability of these deals.
So I came to fervently believe that we make our own deals, wherever we are, through vision, negotiation and hard work. That is to say, even if you live in Hicksville or Ballygobackwards it is possible to do great deals locally, it just takes a commitment and I'm specifically referring to continental USA which is a truly unique and wondrous property market.
Not only this, but the more rural areas seem to deliver the more consistently profitable opportunities with much less competition whereas the trending and higher population centers are much more expensive with very competitive margins and therefore a higher risk.
So for me, it's not just the numbers that make a deal, it also takes vision to look at a property and see how to create an economically viable end product that will generate a decent profit at the end of the day.
Yeah, as the cow said to the bull "that grass sure looks greener on d'other side of the fence".
Great post, David. Thanks! I think like you - it's not so called "location location location", rather it's where the money is made, and that can be anywhere! Money talks, and cliches walk!
Seems more like an opportunity to post about international dealings than to the first rule of real estate, which is applicable everywhere, if you think not, try putting a Hilton on a two lane street in an industrial area! Unless you can transform a large area to be complimentary to your project you need to place your project in the appropriate area, that means location, location, location. :)
Not only that, when I worked out of Ireland travelling to places like Shanghai and South East Asia to do deals I realized after a year clocking over 300,000 air miles (about 20 weeks of physical travelling between airport time and actual flying) that this was a unique form of lunacy, regardless of the profitability of these deals.
It's hard to argue that location isn't as important as we all think it is. Very good attempt though. I would agree that there are good deals to be made even in overlooked locations.
Thanks for the post @Bill G. I was not aware you were also a hotel developer, perhaps you might like to share some of your experiences with us?
Compared to the US, Ireland is size of a football pitch and we have to reach for our passports to go anywhere which is why it's hard not to meet well traveled Irish people, something we take for granted.
There are some hotel chains including Radisson and individual hoteliers who consider the kind of industrial location you refer to as a niche market and there are plenty of instances where hotels have been extremely successful commercially locating in such areas. Airport hotels are a perfect example.
Hi David. I do agree that if your strategy is to flip or rehab then it may be a better approach to do this locally unless you can find a trustworthy partner in another location. However, with rentals I don't see any reason why you can't invest in other states or countries so long as you buy right and have a good PM. I own rentals in London and I haven't been back there since I left in 2009. My PM looks after them and the funds go direct to my UK bank account. They even take care of any rehab/ repairs between tenancies.
If the returns are better in other areas or you want to manage risk and not have all your houses in one location then why not look elsewhere?
Rachel, looks like you set it all up very well and London is probably the best city in the world to own rentals, renting is part of the culture there and bad tenants are not as common as would be in the US. Also, professional property management is taken much more seriously there, so you chose well.
My commentary is directed at the US market specifically which you will agree is a completely different kettle of fish to the UK. Thanks for you insight!
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