Scaling out of state while busy working my W-2

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Scaling out of state while busy working my W-2

Sean Gallagher
TX · Member since 2014 · 151 posts · 23 votes

Bit of a crossroads here, I'm hoping someone with a similar situation could chime in. I'm really busy with my w2 job working all the time to fund my investments. I've been buying SFH's out of state all cash as long term hold rentals. A smaller paid off portfolio seemed a lot easier to manage so that is the path I was on.. but I've come to the realization if I ever want to accumulate serious wealth I will have to use leverage and scale big. How are you able to scale big when out of state and super busy? My estimation was with leverage I could do about 7 homes a year and each year after it would increase. Soon I would be doing a home a month+. Trying to wrap my head around this being feasible while working so much at my w2. My involvement would go down drastically to where the only thing I'm doing would be funding the deals.

-Do you have a property manager that you turn the home over to after purchase and they take care of everything?  

-How much involvement do you have? 

I imagine this isn't cheap but I don't see another way.

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V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
1y

Great question, but there's a bunch of ways to do this. No need to share your income, etc., but my recommendations.

1) Get deeper before you get wider. Meaning get deeper in certain cities, before you go to more cities. My recommendation, depending on income, is to get 2-8 total properties per city and really allocate 40-60% of your intended investment before moving to the next city. Depending on local regulations, you can mix up STR/MTR/LTR.

2) Get systems in place in those exact cities; 2 PMs preferably via NARPM, 2 high quality inspectors, and rotating book of handyman, 1 lawyer, and a credit union contact for leverage along with investor friendly nationwide lenders. You will defer your house to these systems in place, but it's your job to keep check on them. They don't care about your property, to be frank. Have 3 quality lenders per investment property, this keeps them honest.

3) You don't need to go all cash or 80% LTV. Why not a mix? 1.25-2 DSCR per property is healthy, and keep cash set aside of reserves per property. That'll be likely 28-40% downpayment. This is going to keep your bid honest, rather than lazier and keep your cash position stronger.

4) The only time you spend in this, is finding & closing on the quality assets and playing devil's advocates for repair/rehab/fixing costs. Everything in between, someone else does that is professional, licensed/insured and has warranty where it's applicable.

I operate in nearly a dozen cities, multiple properties in all besides one, and these are my systems in place. 

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  • Brandon Leffler
    Rental Property Investor · Stockton, CA · Member since 2020 · 35 posts · 22 votes
    1y

    Im in a similar situation ,but I need more cash flow before I make the jump. Realistically im probably at least a couple years away. Sounds like you have a good W-2 job. What do you do? Do you have LLCs for your properties?

    0Reply
  • Sean Gallagher
    OP
    TX · Member since 2014 · 151 posts · 23 votes
    1y
    Quote from @Brandon Leffler:

    Im in a similar situation ,but I need more cash flow before I make the jump. Realistically im probably at least a couple years away. Sounds like you have a good W-2 job. What do you do? Do you have LLCs for your properties?


    Sent you a message.  These homes are in my personal name right now.  Forming a business to protect my assets is an area I need to gain more knowledge in.

    0Reply
  • Austin McClainBusiness Member
    Real Estate Agent · OH · Member since 2021 · 347 posts · 602 votes
    1y

    I work with a lot of out-of-state investors. I recommend that they use a property manager. It can eat into your cash flow, but if you're earning high income from your W-2 job (I assume you are if you're buying in all cash), it makes more sense to use your time making more income versus managing maintenance requests as you scale. 

    You still need to be involved and watch your property manager to ensure things are running well, but that takes less time than self-managing. Running a portfolio well would be like taking on a second job as you build your own systems 

    [email protected]614-710-4827
    3Reply
  • Joe Norman
    Property Manager · Baltimore, MD · Member since 2014 · 1k+ posts · 1k+ votes
    1y

    A solid property management team (or maybe multiple PMs if your portfolio is large enough) is a must for out of state investing. Be sure to do your due diligence and make sure the PMC is licensed (if required, it's not in all states) and insured. Get references, confirm their systems and SOPS are in place. Do everything you can to make sure you're hiring a solid partner who will protect you and your investments.

    1Reply
  • Greg ParkerBusiness Member
    Realtor, Contractor, Property Manager · Montgomery AL and Kowaliga, AL · Member since 2017 · 663 posts · 536 votes
    1y

    Yep, gotta have a great PM that will not only handle the management, but coordinate renovations, turnovers, aquisitions.

    Go meet them, look at a few of the properties they manage, ask about their systems, processes, etc.

    [email protected]
    MGM Property Pros LLC
    View Page
    1Reply
  • Mike PaolucciBusiness Member
    Realtor · Columbus Cleveland Dayton, OH · Member since 2022 · 491 posts · 549 votes
    1y
    Quote from @Sean Gallagher:

    Bit of a crossroads here, I'm hoping someone with a similar situation could chime in. I'm really busy with my w2 job working all the time to fund my investments. I've been buying SFH's out of state all cash as long term hold rentals. A smaller paid off portfolio seemed a lot easier to manage so that is the path I was on.. but I've come to the realization if I ever want to accumulate serious wealth I will have to use leverage and scale big. How are you able to scale big when out of state and super busy? My estimation was with leverage I could do about 7 homes a year and each year after it would increase. Soon I would be doing a home a month+. Trying to wrap my head around this being feasible while working so much at my w2. My involvement would go down drastically to where the only thing I'm doing would be funding the deals.

    -Do you have a property manager that you turn the home over to after purchase and they take care of everything?  

    -How much involvement do you have? 

    I imagine this isn't cheap but I don't see another way.


    I highly recommend a property manager for OOS investing. The right property manager will take up majority of the workload for managing tenants / maintenance and everything else.  I'd recommend interviewing multiple PM's and seeing which one fits your style and expectations. There's a section under "Build Your Investing Team" for property managers to help you get started. I'd also recommend getting couple recommendations from the realtor you worked with to buy the properties. They should have a couple of recommendations for you as well. 

    It is not a set it and forget it thing though, you'll still need to be active and review monthly statements and manage things to make sure everything is running smoothly. 

    [email protected]614-892-9184
    Reafco - Mike Paolucci 512 Reviews
    WebsiteView Page
    3Reply
  • Zach Howard
    Hong Kong · Member since 2024 · 161 posts · 57 votes
    1y
    Quote from @Sean Gallagher:

    Bit of a crossroads here, I'm hoping someone with a similar situation could chime in. I'm really busy with my w2 job working all the time to fund my investments. I've been buying SFH's out of state all cash as long term hold rentals. A smaller paid off portfolio seemed a lot easier to manage so that is the path I was on.. but I've come to the realization if I ever want to accumulate serious wealth I will have to use leverage and scale big. How are you able to scale big when out of state and super busy? My estimation was with leverage I could do about 7 homes a year and each year after it would increase. Soon I would be doing a home a month+. Trying to wrap my head around this being feasible while working so much at my w2. My involvement would go down drastically to where the only thing I'm doing would be funding the deals.

    -Do you have a property manager that you turn the home over to after purchase and they take care of everything?  

    -How much involvement do you have? 

    I imagine this isn't cheap but I don't see another way.

    Does this mean you currently don't have a property manager? How new are your properties?

    I think a property manager is essential. You still need to manage the property manager though. A good one will also have skin in the game and will even be able to bring new acquisitions to your attention. They should be able to help you scale.

    I like your accelerated and leveraged up timeline, as long as you have a rockstar property manager. I'm sure others have managed to do this, so why not you? Best of luck! 
    0Reply
  • Greg Kasmer
    Rental Property Investor · Philadelphia, PA · Member since 2021 · 772 posts · 499 votes
    1y

    @Sean Gallagher - My initial reaction is that if you're thinking about a property manager to help oversee the daily operations you're probably at a point where you need to get one. From my own personal experience and from others I think most reach the "tipping point" from self managing to using a PM somewhere between 5-15  units, especially if you have a W2 and want to continue to scale. So, don't feel any less of an investor if you go the property manager route. However, one idea to consider is some "middle ground" for your investing... You're using a company to manage tenant phone calls/inquiries and then send in vendors for repairs. There is a company names Hemlane that offers that "light PM" service that may be interesting for you instead of a full blow PM company that may cost 7-10% of revenues. I spoke to Hemlane, but personally have not used them, but sounds like something for you to consider. Good Luck!

    0Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    1y

    Great question, but there's a bunch of ways to do this. No need to share your income, etc., but my recommendations.

    1) Get deeper before you get wider. Meaning get deeper in certain cities, before you go to more cities. My recommendation, depending on income, is to get 2-8 total properties per city and really allocate 40-60% of your intended investment before moving to the next city. Depending on local regulations, you can mix up STR/MTR/LTR.

    2) Get systems in place in those exact cities; 2 PMs preferably via NARPM, 2 high quality inspectors, and rotating book of handyman, 1 lawyer, and a credit union contact for leverage along with investor friendly nationwide lenders. You will defer your house to these systems in place, but it's your job to keep check on them. They don't care about your property, to be frank. Have 3 quality lenders per investment property, this keeps them honest.

    3) You don't need to go all cash or 80% LTV. Why not a mix? 1.25-2 DSCR per property is healthy, and keep cash set aside of reserves per property. That'll be likely 28-40% downpayment. This is going to keep your bid honest, rather than lazier and keep your cash position stronger.

    4) The only time you spend in this, is finding & closing on the quality assets and playing devil's advocates for repair/rehab/fixing costs. Everything in between, someone else does that is professional, licensed/insured and has warranty where it's applicable.

    I operate in nearly a dozen cities, multiple properties in all besides one, and these are my systems in place. 

    4Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    1y

    @Sean Gallagher

    so congrats on your success so far, but like @V.G Jason said I might try to get more focused... your post kinda says "how do I buy more units so that I have more units?"

    and if they were bought in all cash, they should be cash flowing pretty well... are they?!

    with that said, yes, most of use leverage and yes, most of us have professional property managers.  i self manage 1 property that i used to live in and have PMs on the rest.

    i'm trying to BRRRR so that i can recoup all or most of my capital on each deal that i buy, and in 2024 i got outbid on 100% of what i went after.

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    1y

    @Sean Gallagher not a sales pitch, but this is what we provide for investors in Metro Detroit:)

    Understand that if you hire the latest & greatest PMC, many grow using poorly trained VA's.
    - Your portfolio will suffer:(

    You want a PMC that has great systems in place, including a great portal where you can keep tabs on eveything.

    You will also need to manage your PMC on a regular basis.
    Here's an example why:
    - One of our people made a mistake last year, and entered an expense of $1500 instead of $150 - they accidently typed an extra "0". 
    - Fortunately, our transparent systems allowed the owner to catch it:)
    - Full transparency - we would have never caught this honest mistake:(

    An owner also needs to be involved to approve & fund large expenses: maintenance, property tax & insurance payments (if they want to be more hands off), evictions, etc.

    A great PMC should also have a chat with you annually about your future plans for a property and your portfolio. 

    Regarding leverage - use it carefully!
    You can do 20% down, but often won't cashflow. 
    So, maybe do 30-50% down, for better cashflow and make sure you have reserves for mortgage payments in case there's a rental market dip in the future.

    DM us if you have any more questions:)

    [email protected]248-209-6824
    Logical Property Management4.9451 Reviews
    WebsiteView Page
    1Reply
  • Zach Howard
    Hong Kong · Member since 2024 · 161 posts · 57 votes
    1y

    @V.G Jason

    To someone just starting out (only option of OOS) who can get access to 200k, but no additional financing at this time but an additional 50-100k max in reserve cash, where might you recommend they start - markets/property type/strategy?

    0Reply
  • Greg ParkerBusiness Member
    Realtor, Contractor, Property Manager · Montgomery AL and Kowaliga, AL · Member since 2017 · 663 posts · 536 votes
    1y

    https://www.biggerpockets.com/markets?market=Montgomery%2C%2...

    [email protected]
    MGM Property Pros LLC
    View Page
    0Reply
  • Min ZhangBusiness Member
    Real Estate Agent · Member since 2022 · 1k+ posts · 1k+ votes
    1y

    You’ll definitely need a property manager to handle your property. It’s hard to manage remotely, so you’ll need someone local. They’ll take care of everything from listing and tenant screening to addressing tenant concerns. They also have a handyman available for any repairs needed. 

    [email protected]614-412-2912
    Reafco.512 Reviews
    View Page
    0Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    1y
    Quote from @Zach Howard:

    @V.G Jason

    To someone just starting out (only option of OOS) who can get access to 200k, but no additional financing at this time but an additional 50-100k max in reserve cash, where might you recommend they start - markets/property type/strategy?


    $200k in financing, or $200k in cash and looking to leverage from there?

    0Reply
  • Zach Howard
    Hong Kong · Member since 2024 · 161 posts · 57 votes
    1y
    Quote from @V.G Jason:
    Quote from @Zach Howard:

    @V.G Jason

    To someone just starting out (only option of OOS) who can get access to 200k, but no additional financing at this time but an additional 50-100k max in reserve cash, where might you recommend they start - markets/property type/strategy?


    $200k in financing, or $200k in cash and looking to leverage from there?


    $ 200k in financing that is paid off from my "W2" in equal monthly payments for the next 5 years. Covering this with my salary is relatively comfortable. 

    0Reply
  • Bryan Stengel
    Real Estate Agent · Long Island · Member since 2018 · 88 posts · 38 votes
    1y

    Hi Sean, I do out of state investing myself and rely on my property manager the day to day operations.  Your tenants will appreciate it.  If you value your time, it is all worth it in the end.  The income of a property manager is dependent on whether you property is filled with tenants as well.  They are usually real estate salespersons as well.  In the event of vacancy, they will work to market your property for the next tenant.  There is a mutual interest on their part to not only fill the vacancy, but also with the right tenant that they will have to work with later.  

    0Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    1y
    Quote from @Zach Howard:
    Quote from @V.G Jason:
    Quote from @Zach Howard:

    @V.G Jason

    To someone just starting out (only option of OOS) who can get access to 200k, but no additional financing at this time but an additional 50-100k max in reserve cash, where might you recommend they start - markets/property type/strategy?


    $200k in financing, or $200k in cash and looking to leverage from there?


    $ 200k in financing that is paid off from my "W2" in equal monthly payments for the next 5 years. Covering this with my salary is relatively comfortable. 


     I am not sure I would dab into real estate if I need to make the turn in 5 years. 

    The $200k financing would serve as a purpose to be a downpayment, or do you want the $200k to be the top limit of the investment? If the latter, I would find 1 distressed property in a good-very good area and fix it up. This would require you to visit, not necessarily live in that same city. OOS BRRRs are the devil's juice on this forum, but if you set yourself up properly with contracts, etc., you will come out on top just take a bit longer so you need to underwrite that in mind.

    If the former, I would do a combination of fixed income, private lending, and note buying and trade the arb. Collect the difference. 

    0Reply
  • Mya Toohey
    Real Estate Agent · Tampa Florida · Member since 2013 · 630 posts · 303 votes
    1y

    Ask your lender about a bridge loan.... I'm from Tampa Florida and I have a few clients that leveraged their portfolio to buy new properties.  Also, think about creative financing, seller financing and sub to can also be options to grow your portfolio.

    0Reply
  • Zach Howard
    Hong Kong · Member since 2024 · 161 posts · 57 votes
    1y
    Quote from @V.G Jason:
    Quote from @Zach Howard:
    Quote from @V.G Jason:
    Quote from @Zach Howard:

    @V.G Jason

    To someone just starting out (only option of OOS) who can get access to 200k, but no additional financing at this time but an additional 50-100k max in reserve cash, where might you recommend they start - markets/property type/strategy?


    $200k in financing, or $200k in cash and looking to leverage from there?


    $ 200k in financing that is paid off from my "W2" in equal monthly payments for the next 5 years. Covering this with my salary is relatively comfortable. 


     I am not sure I would dab into real estate if I need to make the turn in 5 years. 

    The $200k financing would serve as a purpose to be a downpayment, or do you want the $200k to be the top limit of the investment? If the latter, I would find 1 distressed property in a good-very good area and fix it up. This would require you to visit, not necessarily live in that same city. OOS BRRRs are the devil's juice on this forum, but if you set yourself up properly with contracts, etc., you will come out on top just take a bit longer so you need to underwrite that in mind.

    If the former, I would do a combination of fixed income, private lending, and note buying and trade the arb. Collect the difference. 


    Currently I think 200k being the upper limit of investment makes the most sense and is within my risk tolerance range. What I'm hoping is to value add and refinance a bit later if/when rates go down. Then rinse and repeat. 

    0Reply
  • Jorge VazquezBusiness Member
    Real Estate Broker · Tampa, FL · Member since 2017 · 1k+ posts · 679 votes
    1y

    Hi Sean, 

    Within my 20 years of experience, owning 30 properties and managing over 300, I've seen busy professionals like you scale successfully while working demanding W-2 jobs. The key is to pick a lane—focus on improving as an investor, finding great deals, and letting a solid property manager handle the operations. Interview a few PMs, ensure they align with your goals, and stay involved by reviewing monthly reports. Leverage can help you grow faster—consider DSCR loans or other investor-friendly financing to scale while keeping your workload manageable. You're on the right track!

    Graystone Investment Group4.6268 Reviews
    WebsiteView Page
    0Reply
  • Maranda TuckerPro Member
    Property Manager · Charlotte, NC · Member since 2022 · 152 posts · 118 votes
    1y

    I am a property manager with 200+ clients, half being true investors growing their portfolios who also work a w2 job. They find an agent that they trust, and that agent and I work together to get the job done. A lot of the time, the investor isn't even seeing their properties as we add them. 

    Seveal of my clients came to me not knowing an agent, and i introduced them to the agent they now work with. They started with 2 properties and are now at 15+...

    I would suggest you staet with a great property manager and go from there. If they truly know what they are doing, they will know the real estate agents that understand investing in the area your portfolio is in. A great agent that truly understands what your investing strategy is and the why behind your goals is huge. A property management team that will protect that portfolio is paramount. 

    806-685-1818
    1Reply
  • Allan C.
    Rental Property Investor · Member since 2018 · 826 posts · 809 votes
    1y

    Most of the replies have been to get a PM or put systems in place, but I'll share another perspective. You may not need scale as much as efficiency. Why not buy more expensive assets so you have same returns with less doors? This should be win-win and your 10 yr older self will appreciate it down the line. 

    1Reply
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