American living abroad looking to invest in midwest

Buying & Selling Real Estate
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American living abroad looking to invest in midwest

Ryan Lauretta
Member since 2019 · 15 posts · 10 votes

Hi everyone, overall goal is 8-10% COC and total 15-20% ROI 5-10 year period. Strategy right now is to place 50% of the cash on syndicates focusing on class B/C residential assets and another 50% of cash on single family homes with 70-75% leverage. I am not the "analysis/paralysis" type, the opposite - may tend to pull the trigger too quickly. Investigated several platforms:

Roofstock - Found that prices are inflated and many times quants are not dependable.  Highly volatile experience from many people - some discussions here made me think twice.

Crowdstreet - looks dependable enough, anyone has experience there?

Read blogs, listened to podcasts, books, but still seeking a good and dependable place to start, there's so much noise.   Where do you start?  Who do you trust?  

Would love to learn from others' experience good/bad on looong distance investing (+6 hrs time difference EST). 

I work a full time job but can place 20-25% time on real estate research, investment and management.  

Much appreciate the advice

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Jordan Sinclair
Investor · Adelaide, South Australia · Member since 2015 · 136 posts · 78 votes
6y
Originally posted by @Ryan Lauretta:

Hi everyone, overall goal is 8-10% COC and total 15-20% ROI 5-10 year period. Strategy right now is to place 50% of the cash on syndicates focusing on class B/C residential assets and another 50% of cash on single family homes with 70-75% leverage. I am not the "analysis/paralysis" type, the opposite - may tend to pull the trigger too quickly. Investigated several platforms:

Roofstock - Found that prices are inflated and many times quants are not dependable.  Highly volatile experience from many people - some discussions here made me think twice.

Crowdstreet - looks dependable enough, anyone has experience there?

Read blogs, listened to podcasts, books, but still seeking a good and dependable place to start, there's so much noise.   Where do you start?  Who do you trust?  

Would love to learn from others' experience good/bad on looong distance investing (+6 hrs time difference EST). 

I work a full time job but can place 20-25% time on real estate research, investment and management.  

Much appreciate the advice

 Hi Ryan,

Midwest states such as Ohio see ROI's you are seeking.

All the best on your investing!

2Reply
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  • Martin Vehlow
    Real Estate Agent · Wauconda, IL · Member since 2016 · 208 posts · 99 votes
    6y

    Welcome to BP, @Ryan Lauretta! I don't have experience with long distance investing, but I do know there is a decent amount of B/C single family housing here in the N & NW suburbs of Chicago. Huge need for affordable housing as well. Wish you all the best!

    0Reply
  • Taylor L.
    Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    6y

    You can also build relationships with independent syndicators who do not operate on the crowdfunding platforms. From my observation the best syndicators don't need to use crowdfunding platforms because they have a network of investors on their own. 

    1Reply
  • Ryan Lauretta
    OP
    Member since 2019 · 15 posts · 10 votes
    6y

    Thank you @Martin Vehlow and @Taylor L.  With regards to syndicates, are there ones which you can recommend?  Like tech start-ups (the world I know), anyone can put together a nice presentation, but credibility is the key to reducing risk.  The advantage with CrowdStreet is that they vet (or at least claim to) thus living you really mostly with DD on each deal.

    On SFRs, I think this is where the real impact due to ability to leverage our own cash.  I've listened to many podcasts and done research to have the model figured out.   The issue is that unless I have not figured out how to get a good or at least decent deal from a distance.  I can find the areas and houses online, but too many details are left that would make little sense in closing from afar.  With roofstock which does hold your hand end to end - perfect fit for a foreign investor, the good deals disappear almost the minute they go up on the platform.   

    If anyone has personal experience and has some recommendations I'd love to hear them
     

    0Reply
  • Jordan Sinclair
    Investor · Adelaide, South Australia · Member since 2015 · 136 posts · 78 votes
    6y
    Originally posted by @Ryan Lauretta:

    Hi everyone, overall goal is 8-10% COC and total 15-20% ROI 5-10 year period. Strategy right now is to place 50% of the cash on syndicates focusing on class B/C residential assets and another 50% of cash on single family homes with 70-75% leverage. I am not the "analysis/paralysis" type, the opposite - may tend to pull the trigger too quickly. Investigated several platforms:

    Roofstock - Found that prices are inflated and many times quants are not dependable.  Highly volatile experience from many people - some discussions here made me think twice.

    Crowdstreet - looks dependable enough, anyone has experience there?

    Read blogs, listened to podcasts, books, but still seeking a good and dependable place to start, there's so much noise.   Where do you start?  Who do you trust?  

    Would love to learn from others' experience good/bad on looong distance investing (+6 hrs time difference EST). 

    I work a full time job but can place 20-25% time on real estate research, investment and management.  

    Much appreciate the advice

     Hi Ryan,

    Midwest states such as Ohio see ROI's you are seeking.

    All the best on your investing!

    2Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    6y

    @Ryan Lauretta

    It does not matter where you start as long as you develop your team of 3 (Realtor, Contractor, and Property Manager). This team is crucial to an out-of-state investor. Once you have this team in place you should be able to confidently invest in any market

    As for picking a specific market - I would go after one with an increasing job and population growth. I invest and work in Columbus, Ohio.

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
    Reafco512 Reviews
    WebsiteView Page
    2Reply
  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    6y

    I would check out Columbus, OH @Ryan Lauretta!

    1Reply
  • Ryan Lauretta
    OP
    Member since 2019 · 15 posts · 10 votes
    6y

    Several recommendations on Columbus, Ohio - I actually did start to look in the vicinity and I do have - what I think - are clear investment guidelines. My focus first is on the Syndicates (can't do all at once while having a real time job) then in March I'll get on top of the SFR. Will be happy to receive recommendations on professional firms in the area

    1Reply
  • Ryan Mainwaring
    Rental Property Investor · Blacklick, OH · Member since 2016 · 286 posts · 253 votes
    6y

    @Ryan Lauretta I am meeting with Columbus syndicate in March, if your interested I would love to learn more about your goals.  

    0Reply
  • Ryan Lauretta
    OP
    Member since 2019 · 15 posts · 10 votes
    6y

    @Ryan Mainwaring, much appreciate your offer to help. As far as goals, I am targeting passive income more so than appreciation, would like to see 8-10% COC. I am currently looking at a mix multi-value class B/C in South East U.S. I like the diversification there and the potential upside. The risk/return formula seems to work better for the mixed offerings (given a great management team of course). I don't like the liquidity of the assets (or lack their of), but that's the name of the came.

    As far as SFR, I will follow recommendations here and look at Columbus, OH area and Indianapolis as well. I agree with the advice in this threat that great teams are really the key to managing things from abroad. Right now though, I don't see any other way of proceeding beyond endless internet research other than taking a flight to a targeted area, meet a few professionals, see some houses and move on from there. Maybe I am old school, I just can't see getting a great deal at my level of knowledge just clicking away.

    2Reply
  • Mike D'ArrigoPro Member
    Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
    6y

    @Ryan Lauretta You can easily get those returns in Indianapolis and Kansas City.

    1Reply
  • Alora Glaze
    Indianapolis · Member since 2019 · 288 posts · 179 votes
    6y

    The mid-west is a great market right now - lots of opportunities but few companies that can offer the "boots-on-the-ground" type service needed in order to manage the out-of-state projects. It can be done though! We work with out-of-state/foreign investors consistently and the key is communication and being the type of company that is technologically forward-thinking (i.e. the ease of sharing photo/video updates and making selections for your property).

    Your first protection is making sure you can run the numbers for the right deal - looks like you have a good head for the numbers you need to hit, so you're on the right track already! Regardless if you're living in the same market you want to invest in - the numbers are going to work or their not.

    As mentioned above - once you have your financing in place, and then finding your first "team member" i.e. your realtor is key. You don't need an agent who is in the REI market, but I do find that if you can lean in that direction that the connections and recommendations for the type of REI you want to do will come much more easily.
    Make sure you only work with licensed and insured contractors - they're responsible for the financial and physical success of your project and it is key that you're working with a reliable professional.

    With all that in mind - check out central Indianapolis. Great prospects for fix and flips and buy and holds - it is a street-by-street city which makes the opportunities plentiful if you know where to look (i.e. off market deals on social media or otherwise), not to mention - properties are cheaper and can allow your dollars to go farther, hooray for increased ROI!

    Best of luck to you though!! Distance should never detour you from a good opportunity!

    1Reply
  • Ryan Lauretta
    OP
    Member since 2019 · 15 posts · 10 votes
    6y

    @Alora Glaze, thank you for the detailed response.  I will check out the area and will contact your firm.  Trick is to find a local team that I can trust - if I do, the sky is the limit. 

    1Reply
  • Ryan Lauretta
    OP
    Member since 2019 · 15 posts · 10 votes
    6y

    On that note, anyone experienced with remote BRRRR projects (I have David's book on order)?

    1Reply
  • Charles Carillo
    Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes
    6y

    @Ryan Lauretta

    I agree with @Taylor L. and I feel the best investments and syndicators are the ones that do not formally advertise. It is similar to some of the best hedge funds where are number of them are 506 B (unable to advertise). They are usually only available to investors with personal relationships to the general partners. 

    1Reply
  • Joe HammelBusiness Member
    Real Estate Agent · Metro Detroit, MI · Member since 2018 · 614 posts · 666 votes
    6y

    Hi @Ryan Lauretta, I see your comment on getting David Green's book, I'm just about finished with it myself. Very good read! 

    Looks like you're getting good advice here. Getting Boots on the ground definitely helps. In the Detroit Suburbs on SFH you can find roughly 8-10% ROI on A- and B+ neighborhoods.. then 12-18% in C neighborhoods.

    [email protected]248-422-1685
    FIRE Realty Team - Keller Williams5380 Reviews
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    0Reply
  • Taylor L.
    Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    6y
    Originally posted by @Ryan Lauretta:

    Thank you @Martin Vehlow and @Taylor L.  With regards to syndicates, are there ones which you can recommend?  Like tech start-ups (the world I know), anyone can put together a nice presentation, but credibility is the key to reducing risk.  The advantage with CrowdStreet is that they vet (or at least claim to) thus living you really mostly with DD on each deal.

    On SFRs, I think this is where the real impact due to ability to leverage our own cash.  I've listened to many podcasts and done research to have the model figured out.   The issue is that unless I have not figured out how to get a good or at least decent deal from a distance.  I can find the areas and houses online, but too many details are left that would make little sense in closing from afar.  With roofstock which does hold your hand end to end - perfect fit for a foreign investor, the good deals disappear almost the minute they go up on the platform.   

    If anyone has personal experience and has some recommendations I'd love to hear them
     

     When the recommendation question comes up I always recommend folks learn to evaluate deals and sponsors (BP has may resources you can use). Then make your own choice, for a few reasons:

    1. You know your own goals better than anyone else
    2. Your goals are different from mine
    3. You will have different opinions of deals and sponsors than me
    4. I am not 100% objective because I do sponsor deals in addition to investing passively.
    0Reply
  • David Pere
    Rental Property Investor · Springfield, MO · Member since 2016 · 1k+ posts · 890 votes
    6y
    @Ryan, I have been investing from across ocean(s) as an active duty Marine for a few years. I'm finally back in the continental U.S, but stationed in California and investing in Missouri. It is definitely possible, and I'd be happy to help in anyway I can!
    0Reply
  • Ryan Lauretta
    OP
    Member since 2019 · 15 posts · 10 votes
    6y

    My own two cents from the world of tech entrepreneurship, the fact hat you have demand may stem out of your ability to sell, not necessarily from a great product.  I've seen ultra demand for tech assets that are crap because the entrepreneurs just knew how to sell and vice versa.  This means that there can be some gems on the open market places, and hopefully I just found one.  Much appreciate the advice though.  

    0Reply
  • Jennifer S.
    Investor · London · Member since 2017 · 160 posts · 82 votes
    6y

    @Ryan Lauretta I'm just catching up with notifications and saw your post. I'm not sure which country you are in right now and if you are a tax resident there but that can complicate a lot of issues around what you can invest in. If you've gone abroad recently you might be ok but I made the mistake of not keeping my eye on when I would start to have to bring things onshore. For example I have trouble investing in plain vanilla US mutual funds that don't report to the UK HMRC. If you are high net worth enough you can get good advice but the advice for mass affluent folks in real estate crossing 2 countries is harder to access in my experience in the past. I keep looking though. So syndications have been off the table for me for the moment. Happy to connect and discuss this stuff.

    0Reply
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