Out of state investing from California
Claremont, CA · Member since 2016 · 14 posts · 2 votes
There are obviously many ways you can go about your objective. Here's one alternative. It would be an option to seek out a joint venture partnership with somebody in the area that you are looking to invest in. Most real estate agents will not understand your business model and how to find you what you are looking for. True in all instances but joint venture partner cannot only acquire property strategically but also create a lot of other value by analyzing the condition of the property as well as the repairs from a short-term and long-term value creation standpoint. Cash flow is great but you want to also ensure that when you sell at a later date that you have a good equity position. Good Luck.
Hey BP!
Had a generalized question about investing out of state. I currently live in California and seeking to invest in profitable and cheap areas out of state due to California having high priced properties. What is the typical process for a me who has a primary residence which I'm currently paying my mortgage monthly and live in and wanting to purchase my second as an investment property. More specifically I'm looking for a 4-Plex multi-family property to increase cash flow. I'm thinking I need to attach to a real estate agent at that particular area as well as a property manager to oversee issues that may arise since I'm obviously not physically accessible. Any insight will help. Thanks guys!
Christian Please go through some of my older post. I used to own a turn key , and sold though a lot of resellers out there. I am no longer in the business but can offer a lot of advice. Which I have shared with folks here on BP. Pm if you would ever want to speak. I was buying and selling in NC , SC, Georgia , and Florida from 2009-2013. So please ask away.
Alex
Hello Christian,
I am in a very similar position to yourself. I currently invest in Florida and recently closed on a multi-family property while being overseas, since I've began investing in real estate all of my purchases have gone sight unseen. As our scenarios are similar I'd like to offer you some advice. Please feel free to PM should you have any further questions.
While I utilize the services of a property manager, I did not have the need to utilize a real estate agent. By building your knowledge base on the local market you are targeting to purchase a property, you will be able to identify a list of potential investment properties. You have a state you want to invest in, through research you'll eventually narrow it down to a region, county, city, etc. that has a market to meet your criteria.
When searching for my property knowing that I would most likely acquire without ever setting foot in the property I set especially strict criteria in order to mitigate as much as possible.
There is the strong possibility that your investment will be acquired sight unseen, it is especially prudent to negotiate terms that are favorable to you in terms of assessing the property and that affords you the time to make decisions from afar. You will also need to identify local area vendors such as inspectors who are reputable to provide accurate information to enable you to make accurate determinations. This may entail some additional cost to get to hedge your risk to a point that a local investor would have but it is very prudent to do so.
Work with lenders in advance, if you require unique financing or have a unique scenario. It is best to use an established relationship with a lender, or to identify one with enough time to let you know what you will need to have in place for your scenario.
I hope that this can serve as assistance to you and if you have any questions again please feel free to PM me.
Christian,
All of the advice that you have been given thus far in this thread is spot on. As you learn, you must also 'consider your sources'. I am a Real Estate Consultant, Broker, & Investor in the Metro-Atlanta area. I have been in the industry for quite a while. I say that not to boast, but to let you know that most traditional real estate agents don't have a clue when it comes to investment real estate. Most only focus on their commission.
I decided a long time ago to learn my craft in this niche. There is a distinct difference. As @Chris Paglialunga stated earlier, one of the most effective strategies for out-of-state investing (in my opinion) is that of joint ventures. You act as the passive investor with the funding, while the Catalyst does the ground work and execution. However, be very careful in the selection of that joint venture partner. As I have said many times before, it seems everybody and their brother are 'real estate investors' these days. I guess it's 'sexy' again.
For instance, when I work with passive investors, I provide a detailed project summary to a potential partner prior to ANY funding. The passive investor also has the option of straight debt and/or equity which we agree on prior to the transaction. I play above board, and don't do the smoke and mirrors. It's counterproductive, and there is too much legitimate business to be had.
I hope this helps as well, and the best of luck to you.
More Information on Anthony Welch
Anthony.