First Rental Help 1.5hrs away

10 Replies

Hi,

I am brand new to RE investing.  I live in suburban Philly and want to learn as much as I can to a few seasoned veterans willing to share their knowledge.  I'm pretty sure I want to get into multi-family units, but always willing to hear your thoughts on the pros and cons, along with other options.

I came across an option in a good, small college town, but it's 1.5hrs away.  Multi-unit (3 +garage) that presently brings in $2050/mo (all month-month leases presently). Mortgage $816/mo. Worth looking into via 50% rule.  Will need to check the bones.  Anyone do a long distance rental with their first investment? I am thinking I will need a PM as I work full time. Advise???

Excited to begin the journey

Thanks!

Chris

@Chris Miller do you have any numbers to share with this deal? Personally I wouldn't want to self-manage something that far away, so I would need to include PM into my expense numbers and see if the deal still made sense. If it still pencils out after accounting for management though, then sure I'd consider it.

Here is what I know: annual taxes ar $3063, tenants pay all utilities except trash and sewer (have call in to find out those costs). List cost as $83/sq ft, but not sure if the separate rented garage is counted in that.  All gas furnaces are newer, but I don't know specifics about any of the other mechanicals.  Vinyl siding, built 1920.  I need to find out what a PM would cost, obviously...  I have a call into my realtor out there (also my niece).

One of the BP guys wrote a book titled something like  Long Distance Real Estate Investing. Im going to go out on a limb and say that one may be a good starting point. 

@Chris Miller - I would suggest professional property management.  They should also be able to speak to the expenses and market rents.  They will also have an established network for the inevitable repairs.

My first investments were SFR in TN. I live in Alaska and never saw them in person. Long distance investing is done all the time, you just need a good team in place.

90 minutes isn't that bad. I don't think you need a PM, but definitely a good handy man and make contacts with trades.  Set your ground rules, so that you don't get the 2am phone calls when a tenant loses their mail box key. (True story). 

@Chris Miller get a good PM regardless of distance. If you choose well they'll bring more value than you can. Also, that fee you pay them... 8-10% a month, paid to yourself to manage your own property is telling of how poor a use of your time managing your own properties is if you can delegate effectively.

@Chris Miller Project Managers are crucial especially if you are new to the game. I'm over by you in Philly and work around in the city and surrounding counties. I work with many clients from New York, Cali, Israel, all of which use property managers. This allows them to scale and saves them from having to answer calls and fix toilets at 1am when they are already working full time jobs outside of REI. That being said, if you are new to the game, managing a property yourself can prove invaluable when you are vetting PM's. This is what let's you find the RIGHT FIT.