Rental Property Investor · Cleveland, OH · Member since 2015 · 24 posts · 6 votes
Hi there! Newbie here. I'm really excited to get into REI and have been searching my area for quite some time. But the prices are too high and/or not worth it to invest here since the Cash on Cash ROI average about 4-8%. I know I can personally do better in the stock market or peer to peer lending with those rates.
So I've been talking to a couple buddies out of state (OH, MN, ID, etc..) where the markets aren't as crazy as the greater Seattle area. And I have been baffled by how cheap the prices are and have run some calculations which provide a way better return
I'm under no illusion that I can ask the same rent prices they do here in the Seattle area, but am gathering an average from other rentals in the area.
The problem is, that OH, MN, ID are not around the corner and driving over to check out the property to see if things are still alright is not an easy task.
How have you dealt with buying property out of state? Using a good property management company is key I'm assuming, what else should I watch out for?
Investor · Los Angeles, CA · Member since 2015 · 40 posts · 10 votes
10y
Hey Michael, I live in LA and currently am buying in Maine. I think the key is that you need a team in whichever market you're in. It's not crazy to do it at a distance but you need to have the keys in place. Start with a realtor you can trust. That will be the point guard to your team-at least has been for me- to finding most properties, management, contractors, etc. it did help that I had somewhat of a foundation already. I own a vacation property and lived there - but I lived there nearly 15 years ago. Regardless, you'd be surprised how knowing just a couple of people in the commentary will help you find others. Secondly, run the numbers everywhere you look. If the numbers work on a property then it should tell you that people are at least interested in living in the area. Don't get sold on that but it's a good indication. There could be crazy things happening in the area that would make it turn bad, you'll never know unless you get out there and look HOWEVER a good trustworthy realtor will already know these things and they won't steal you into a place that has bad upside potential especially if they think you're going to be a loyal investor. For me, I am looking in my original home state of Texas now, but I know what the coast of maine has done for my current properties and so although the properties are older they are built like brick ----houses. Some people would be scared of that but I know the market and the structures of the houses and I can see how they withstand. Bottom line, do some research on the two of property you're interested to invest and look at that market. See how things have weathered the ups and downs of the economy. If you have a friend somewhere you've always been curious about, might be time to make a visit. Good luck! Kaylyn (sent from my phone so sorry for any typos)
Rental Property Investor · Cleveland, OH · Member since 2015 · 24 posts · 6 votes
10y
@Joe Moore thanks for all the information! I'm not looking for the get rich scheme (though who doesn't won't to win the lottery :) and I'm in it for the long haul. Just like you I'm seeking financial independence, I'll definitely keep on grinding.
Sheffield, IL · Member since 2012 · 85 posts · 27 votes
10y
@Michael D.I have a sizeable portfolio of properties in Indianapolis, Memphis, and Houston and have plenty of experience with lots of management companies, good and bad. PM me if you want to talk further.