convincing the old school to invest out of state

Physician · Oakland, CA · Member since 2017 · 60 posts · 28 votes

I need advice! I am trying to convince my old school father that investing out of state is a viable option. My father invested in the bay area when it was possible (not possible anymore). A 1031 exchange is coming up and I would like to start looking at other markets...(Houston are there?). He is pretty skeptical of my approach. I was trying to explain BP to him and what all can be gained from this community. Any advice on how to convince him that its is quite possible. I really don't want to take the amount from the 1031 ex and buy one stinkin box of a house in the bay area. Thanks!

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Brie SchmidtBusiness Member

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Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes

@Anita Ahuja - You need to show him. Take a trip, see some properties, run the numbers, and present it.

If he still isn't convinced then that is his choice. But you can show him the information and let him make his decision.

I like to explain it like a car dealership, I am a Nissan dealership. If you are interested in a Nissan, I can tell you all about it. But that doesn't mean a Nissan is the best fit for you. I can provide you with the info and answer your questions, but ultimately you need to decide what is right for you.

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Brie SchmidtBusiness Member
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Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
8y
@Anita Ahuja - You need to show him. Take a trip, see some properties, run the numbers, and present it.
If he still isn't convinced then that is his choice. But you can show him the information and let him make his decision.
I like to explain it like a car dealership, I am a Nissan dealership. If you are interested in a Nissan, I can tell you all about it. But that doesn't mean a Nissan is the best fit for you. I can provide you with the info and answer your questions, but ultimately you need to decide what is right for you.
Investing is that same
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Second City Real Estate4.821 Reviews
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Ernie V.
Rental Property Investor · Milwaukee, WI · Member since 2014 · 63 posts · 16 votes
8y
Originally posted by @Brie Schmidt:

@Anita Ahuja - You need to show him. Take a trip, see some properties, run the numbers, and present it.
If he still isn't convinced then that is his choice. But you can show him the information and let him make his decision.
I like to explain it like a car dealership, I am a Nissan dealership. If you are interested in a Nissan, I can tell you all about it. But that doesn't mean a Nissan is the best fit for you. I can provide you with the info and answer your questions, but ultimately you need to decide what is right for you.
Investing is that same
As a dealership employee, I love it!
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Andrew Johnson
Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
8y
Anita Ahuja Sketch out some pro-formas on real properties. Maybe you get a stinkin’ box in the Bay Area but a nice yield play out in Houston. Maybe he thinks it’s nice to drive by the property but hasn’t considered a more landlord friendly state. Maybe you can’t afford property management in the Bay Area but you can afford the 10% in Texas. But, really, at the end of the day it’s his money, his decision, and his comfort level. That’s what makes investing great, you get to choose how and where to invest your money. If you love Houston, make that where you invest.
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Account Closed
Registered Representative · Bend, OR · Member since 2018 · 91 posts · 38 votes
8y
Whenever someone invests out of state, they need to be prepared to manage those properties from afar and possibly file tax returns in additiobal states. I would ask him first what his major concern is then go from there.
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Dave FosterBusiness Member
Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
8y
@Anita Ahuja, I was intrigued with this question so I went to your profile and was touched. You have a heart for people and your father is your hero! That is awesome. I'm going to leave the herd at this point and offer that the decision that makes the most financial sense may not be the best decision given your heart. As your father has lived he has carved out a life for you and the rest of his family on his terms with his efforts and love. He knows what he knows and it sounds like he doesn't want the adventure (or fear and uncomfortableness) of changing that.
Maybe the best course is to honor your father and support his desire to keep his 1031 close by geographically but use your own resources to start a thriving out of state real estate empire. The price points of may out of state regions would allow you to buy several properties from one year of your salary. Then when your father sees your success he might welcome the opportunity to truly partner with you to continue to build your empire. He can always 1031 again in a bit. And there's not too many folks who have gotten hurt holding property in the Bay (or that other bay as we here in Tampa Bay like to say).
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Anita Ahuja
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Physician · Oakland, CA · Member since 2017 · 60 posts · 28 votes
8y
Dave Foster Thank you so much for your kind words. Since this post, I’ve decided to invest on my own with the hopes of showing him possibilities. You are right, at his age of 81, doing something new may be too out of his comfort zone. I have the genes, so I too can be successful!
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