Beginner getting into a 10 unit out of state.

[Chad Rakestraw]

I am a brand new investor looking to buy my first property and came across a 10 unit out of state that has a really good looking P&L. There are minimal repairs needed and the property seems to be in really good shape in a not so good area. The upside is the rent costs per unit are below average for the area and the property itself seems cleaner than most options. I know the risk given the current rental moratorium. It costs 450k and is showing a 40k a year net. I would obviously use a property management company to manage the property. 

My questions are..

1. Is this is a smart idea to utilize the majority of my investment capital to go straight into a 10 unit out of state? 

2. Wheres the best place to try and get a loan for a 10 unit like this? I knot it needs to either be a commercial loan or a private capital partner. 

Thanks ahead of time for any wisdom you can provide. 

[Katrina Razavi]

Hi Chad, the one part I'd call out is property management. I've spoken to countless fellow OOS investors who have given up on OOS investments b/c their property mgmt costs were way higher than expected and they went through numerous firms b/c they felt that they weren't trustworthy and/or nickel and diming them. 

In terms of going in on a 10-unit for your first deal, you'll likely get a variety of opinions. Me and my partner started w/ a duplex, then 4-plex and are now looking at a bigger # of doors know that we have our contacts down, processes and have gone through a bunch of lessons learned. That said, dont' let me discourage you, with the right grit, time and persistence, it's definitely possible and if the #'s make sense, the #'s make sense. 

Jumping off what others have said on this thread, perhaps you can JV w/ a local investor in that area who can go on-site if needed and take on the property mgmt aspect so that they also have "skin in the game" and aren't incentivized to overcharge.

Best of luck!