Long distance investing Help (Where to start)

13 Replies

I’m looking to getting into out of state investing but need help what to do first.

My markets I’m interested in are Chicago, Milwaukee, Indianapolis, Ohio, New England and possibly Detroit.

I am actively saving and making great strides, however I need to figure how to make the first move. Should I physically travel to these areas and get a feel for them before I get a Realtor involved or try to find a good Realtor first? I am a current Realtor in the state of Florida right now. Should I start talking to local lenders in each area? Please help!

My budget is under $250,000 and looking for multifamily (4 units or less).

@Joe Matthews what makes you interested in out of state markets? I can vouch for Ohio being a solid place to get appreciation and cash flow. Regardless of out of state markets, it'll be important to get to know a solid agent, property manager and lender. DM me if you want some contacts.

Originally posted by @Joe Matthews :

I’m looking to getting into out of state investing but need help what to do first.

My markets I’m interested in are Chicago, Milwaukee, Indianapolis, Ohio, New England and possibly Detroit.

I am actively saving and making great strides, however I need to figure how to make the first move. Should I physically travel to these areas and get a feel for them before I get a Realtor involved or try to find a good Realtor first? I am a current Realtor in the state of Florida right now. Should I start talking to local lenders in each area? Please help!

My budget is under $250,000 and looking for multifamily (4 units or less).

 I would start by talking to a local Realtor. There are a bunch of great ones here in Ohio.

I would tap the brakes for a minute.  You're looking for a multi-family property.  Why?  You've chosen various markets.  What was the criteria?  I'm not doubting your process but sharing that the most successful entrepreneurs seek the best opportunity in a well vetted market. The demand - thanks in large part to Covid - is for SFHs. Even large tract builders are now constructing "rental SFH communities" so they can capitalize on year-over-year increases as well as in property appreciation.

My recommendation would be to choose a city/market that you actually enjoy and explore opportunities - not property type.  You'll want to find an investor focused realtor/broker - not a residential/general one - who can lead you through rent demand and prices, population trends and more.  A multi-family building is nothing worth owning in itself - it's about running a business. The property type is meaningless.

Best.

I would do some market analysis and find different pockets that make the most sense in regards to unemployment rate, job growth, major employers, rent rates/premiums/growth, crime rates, etc. Then start building your "team"- attorney, prop manager, broker/agent, insurance broker, etc. 

These are the first steps I would take AFTER coming up with specific investment criteria and goals. 

@Joe Matthews

Hi Joe, I'm also a Real Estate Agent Investor and Property Manager here in the Tampa, Florida Area.  I would narrow down your area.  As you know the market is HOT everywhere.  You need to find the area that isn't HOT yet.  Prices are so high and you are in everyone's price range.  You can look through the BP network and find some Realtors to talk to .  Find your area and go visit. You might be priced out of some of the area's and you don't want to waste money on that travel.  It should be pretty easy to find what area's that are even viable by a quick chat with an agent.  You should be able to use a nationwide lender to buy.  Get a solid pre-approval from them and it will be easy to buy in any area without any headache.  You can also find lenders here in the BP network.  BP is a great resource.  Best of Luck to you!!!!!!  

We are also out of state investors. I can tell you from experience that it's very valuable to visit the area you're planning to invest in before you pull the trigger. As the Real Estate Guys like to say, real estate is local. There is so much variation from neighborhood to neighborhood and even street to street. Get a feel for where you want to invest so when a deal comes up you know if it's an area you want to be in. Also, it's hard to take someone else's word when it comes to what you're looking for. We had a realtor from Pocatello Idaho caution us to avoid "the hood." After driving around for 2 days we had to ask where "the hood" actually was because we saw nothing that would meet our definition of it. Turns out it was just a solid C class area with a few rough properties mixed in and the occasional dead car in the driveway. Nothing overly worrisome, but it's all a matter of perspective. If I've spent time there, I have a feel for the area and can know from the listing if it's somewhere I want to buy or not.

Originally posted by @Joe Matthews :

I’m looking to getting into out of state investing but need help what to do first.

My markets I’m interested in are Chicago, Milwaukee, Indianapolis, Ohio, New England and possibly Detroit.

I am actively saving and making great strides, however I need to figure how to make the first move. Should I physically travel to these areas and get a feel for them before I get a Realtor involved or try to find a good Realtor first? I am a current Realtor in the state of Florida right now. Should I start talking to local lenders in each area? Please help!

My budget is under $250,000 and looking for multifamily (4 units or less).

 

Before we invested long distance we made efforts to travel to the locations; but we didn't do it every time. So my answer is yes- if you can afford it, travel to the locations. 

Now I have to say that there were times we pulled the trigger without physically traveling. We worked the phones and if we have a network in the city, we worked out network to build up what we needed.

With regards to lenders- No need to travel to meet with lenders unless of course your talking about private money lenders, unless the lender wants to meet you face to face.

@Joe Matthews - Happy to help you if you are interested in investing here in Chicago.  I can put you in contact with some great agents, lenders, property managers, etc.

Although our taxes are high, the numbers still work and there is a plethora of inventory in need of rehab.

@Joe Matthews be very careful investing here in Chicago based on your budget. I invest in one of the more moderately priced markets, and 250k just isn't enough anymore. It used to be, but the suburbs where I focus on like Berwyn are up 12-15% from last year. A decent 2 unit will be 300k (and the numbers don't work). Then you have to pay a PM which makes it even harder. 

Make sure you focus in on your sub market when you look. Each of these towns is good sized, but Chicago is multiple times larger than the other towns so just keep that in mind. 

This is all about building the right team. You will not have success, unless you have a good team in place. Check out my article here as well: https://www.biggerpockets.com/...

As for those markets: Indianapolis is solid, as long as you're in good and growing areas. Ohio attracts a lot of people, but I would say Columbus and Cincinnati are the only real growth markets. Milwaukee, Chicago and Detroit are not really growth markets, so I would not be investing there.  

If you are looking to invest $250k out of state, you may want to look into investing in syndications. 

Your agent and PMC should work together to find you great properties. 

Don't recommend relying solely on an agent as they're out of the picture after the closing. 

No one has more "skin in the game" than a PMC as they have to deal with the property every day until an owner sells or fires them.

Originally posted by @Joe Matthews :

I’m looking to getting into out of state investing but need help what to do first.

My markets I’m interested in are Chicago, Milwaukee, Indianapolis, Ohio, New England and possibly Detroit.

I am actively saving and making great strides, however I need to figure how to make the first move. Should I physically travel to these areas and get a feel for them before I get a Realtor involved or try to find a good Realtor first? I am a current Realtor in the state of Florida right now. Should I start talking to local lenders in each area? Please help!

My budget is under $250,000 and looking for multifamily (4 units or less).

 Hi Joe, I would recommend checking out the Columbus, OH market. There are plenty of good deals under the $250K range.