Can't Get Momentum With Boots on the Ground OOS..Suggestions?

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Can't Get Momentum With Boots on the Ground OOS..Suggestions?

Jeff Petsche
Real Estate Broker · Yorba Linda, CA · Member since 2017 · 154 posts · 114 votes

Hello BP Community. I'm looking for some advise/suggestions regarding building the relationships/teams with boots on the ground in OOS markets.

I'm a real estate Broker here in Southern California and investing in my own backyard is just not an option for me at this time. I still run my retail business here, but it's not the best area for buy-hold/cash flow. Just too expensive.

I am part of several referral groups on Facebook and have success making the initial contact with many other agents in various markets, but then that is where it seems to stall. The initial conversations go great, I provide my buy-hold criteria to the agents, I let them know I have $200K in capital to invest with and then NOTHING happens.

My partner and I are ready to pull the trigger and get our first few deals under our belt, but I'm not getting the deals put in front of me to analyze at this point. I'm doing my own searching online, but when I call to get more information about the property, the rental market, etc. it's dying on the vine.  

I've also been given some resent referrals for local banks and hard money lenders in the markets I'm looking, so I have my financing set up, and are you ready for this, over the past week NOBODY has returned my phone calls. Yes, NOBODY!

I'm staying positive and I keep getting on the phones because I know somebody will want my business, but was hoping others here could share their experiences when they were building teams OOS.

I'm not even opposed to getting on a plane to visit the markets, set up some meetings and hunt for some properties while in town because real estate is my 100% focus. 

Suggestions?  

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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
9y
Originally posted by @Jeff Petsche:

@James Wise Thanks for the comment and in NO WAY did I come across in the manner in which you described. Because we all work for the same umbrella company (Keller Williams Realty), the conversations were very professional and respectful in every way.

I think it's the latter of your comment. I think these agents are either talking themselves out of the fact that there are deals out there to be made, you just have to look under a lot of rocks to find them. I know some have given into the fact that the areas are saturated and too competitive to have a chance at the numbers we are trying to hit, or they just don't have the experience working with OOS buyers who are not paying retail prices.

I know a few of the agents refused to write low offers because they were worried about insulting the seller/listing agent and damaging their reputation. I respect it, but they are just not the fit for me and my partner.

 Jeff with all due respect it sounds as though you came across exactly as I described in my original comment.

"too competitive to have a chance at the numbers we are trying to hit"

Translation; we want to pay less than what everyone else is paying for the same product.

"buyers who are not paying retail prices."

Translation; we want to pay less than what everyone else is paying for the same product.

"I know a few of the agents refused to write low offers because they were worried about insulting the seller/listing agent and damaging their reputation. I respect it, but they are just not the fit for me and my partner."

Translation; we want to pay less than what everyone else is paying for the same product.

If not one, but several agents are not calling you back I think it's time to identify what the common denominator is here.  Agents like to make money. You are an agent, who clearly likes to make money. As a fellow agent would you really be excited to work with someone who wants to buy the same product as everyone else, only he needs to get it for a cheaper price? I sure wouldn't.

Imagine a family comes into your office telling you that they need to move into a 4 bed home in a certain school district. You explain to them that in said school district 4 bed homes comp at $400k. They explain to you that if you can get them one for $320k not only will they buy it they will refer you to their friend who also wants to buy one of these $400k homes for $320k....Sounds pretty ridiculous doesn't it? Would you jump to work with them and anxiously wait for the referral of their friend? Or would you show them the door & work with the family who is ready, willing and able to pay $400k? I think the answer is clear.

When we talk about the family and the school district it seems so clear and obvious that they would make for a bad client. However when "investors" talk to out of state Realtors about "investment" properties exactly this way, investors don't seem to fathom the idea that they too could be a bad client.

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  • Dylan VargasPro Member
    Rental Property Investor · Chico, CA · Member since 2016 · 625 posts · 336 votes
    9y

    @Jeff Petsche @lesley resnick  "I'm not even opposed to getting on a plane to visit the markets, set up some meetings and hunt for some properties while in town because real estate is my 100% focus". This is what I would do. Then you can search out a team. I am thinking the same. What area are you looking in? Lesley responded fast to me in the Jacksonville area just fyi. 

    2Reply
  • Jorge Kuzmicic
    Brooklyn, NY · Member since 2017 · 39 posts · 13 votes
    9y

    3 people is a team Yes? Jacksonville Top Agents(according to google)

    http://www.watsonrealtycorp.com/

    Its a numbers game how many deals are you analyzing a week, focus on 1 market, how many calls text and emails Put the numbers in use technology to make efficient use of time and travel. Lets network and focus on the 1 area and Like minds can crack this.

    Interested in flipping and creating cash flows through residential and commercial rentals.

    0Reply
  • Jeff Petsche
    OP
    Real Estate Broker · Yorba Linda, CA · Member since 2017 · 154 posts · 114 votes
    9y

    @Dylan Vargas Thanks for taking the time to comment. Looking at several markets, but not Jacksonville. Staying out of Boom/Bust states like FL, CA, NV and AZ. My top 3 right now are Indianapolis, Indiana, Columbus, Ohio and either Memphis, TN or Oklahoma City, OK.

    1Reply
  • Garett Koehler
    Otway, OH · Member since 2017 · 6 posts · 4 votes
    9y

    Jeff, What is specifically pointing you to the Columbus area? I am 80 miles south of there. Living in Ohio (Southern and rural portion) I have had lots of trouble getting people to return calls in any business function. I am currently looking for my 1st buy and hold property and am struggling to find the correct people here to surround myself with to build those business relationships.

    2Reply
  • Andrew Johnson
    Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    9y
    Jeff Petsche You may just be in a situation where you have to start the legwork. Identify 3-5 properties you'd have interest in and what you'd like the agent to do for you to help with the diligence process. If you can get 1-2 this look promising, book a plane ticket and let the agent know when you're coming to town. Have them arrange showings on that (likely) weekend at your target properties and throw in another 5-7 that look like potentials. Odds are if they think they have other (better) deals they will tell you about them as well. Will it work for you? Who knows. I'm sure there's a good percentage of agents that don't want to deal with out-of-state buyers. Let's face it, we don't close as often as people that are local. Not to mention there has to be *some* agent on BP that works your desired area. At least I'd think there is...
    2Reply
  • Brett Snodgrass
    Investor · Indianapolis, IN · Member since 2014 · 2k+ posts · 601 votes
    9y

    @Jeff Petsche  Network with Agents, ETC and find out who are the BIG investors in the area.

    You don't need a lot of Buyers to have a decent business.... I would focus on getting to know the heavy hitter buyers who buy quite a bit in the area. Thanks, hope this helps.. Brett

    1Reply
  • Jeff Petsche
    OP
    Real Estate Broker · Yorba Linda, CA · Member since 2017 · 154 posts · 114 votes
    9y

    @Garett Koehler I have a friend who is investing in Columbus and is having great success with duplexes in a very specific part of town where there is a high demand for the schools. My friend's brother is an agent with Keller Williams in Columbus and does some active investing with her as well, so having boots on the ground in that area appears to be going in the right direction. I've also researched the unemployment and vacancy rates in Columbus vs. other parts of Ohio and it appears to fair much better than the national averages or Cleveland and Toledo areas.

    0Reply
  • Jeff Petsche
    OP
    Real Estate Broker · Yorba Linda, CA · Member since 2017 · 154 posts · 114 votes
    9y

    @Brett Snodgrass Thanks for the comment Brett. I'd be interested in connecting with you sometime because Indianapolis is in our top 3 of markets to invest in, and would like to get your feedback. Also, I heard your podcast on BP and congratulations on your massive success. Would love to connect and pick your brain as I am starting out. Not new to real estate as a whole, 14 years of experience in the retail space, but now looking to build my investing business. I believe you wholesale in Indianapolis, so would like to see what your inventory looks like and see if we can do some business together.

    0Reply
  • Jeff Petsche
    OP
    Real Estate Broker · Yorba Linda, CA · Member since 2017 · 154 posts · 114 votes
    9y

    @Andrew Johnson Thanks for your comment Andrew. Great advise and it looks like that is what I'm going to have to do in order to keep the momentum going. Very challenging when you don't or can't invest in your own backyard.

    I know it can be done because I hear success stories all the time, so it's just about perseverance!  

    0Reply
  • Matt K.
    Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
    9y

    Get some beers, sit down on the computer, fire up google earth, go for a cruise till you run out of beer. I spent hours looking at the areas I was interested in on google earth getting a feel for what to expect what and then checked them out in person. You can get a decent feel for the area buy hoping on the freeway during "rush hour" and then grabbing some dinner/drinks during happy hour.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    well there are certainly no shortages of houses or properties to buy in those markets.. one 3 day trip and you would spend all your money easy... although most of the sellers want to sell turn key to maximize their profit.. 

    and if your trying to remote rehab your taking on a HUGE risk that you need to be very cautious of

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  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    9y
    Originally posted by @Jeff Petsche:

    Hello BP Community. I'm looking for some advise/suggestions regarding building the relationships/teams with boots on the ground in OOS markets.

    I'm a real estate Broker here in Southern California with Keller Williams Realty and investing in my own backyard is just not an option for me at this time. I still run my retail business here, but it's not the best area for buy-hold/cash flow. Just too expensive.

    I am part of several referral groups on Facebook and have success making the initial contact with many other KW agents in various markets, but then that is where it seems to stall. The initial conversations go great, I provide my buy-hold criteria to the agents, I let them know I have $200K in capital to invest with and then NOTHING happens.

    My partner and I are ready to pull the trigger and get our first few deals under our belt, but I'm not getting the deals put in front of me to analyze at this point. I'm doing my own searching online, but when I call to get more information about the property, the rental market, etc. it's dying on the vine.  

    I've also been given some resent referrals for local banks and hard money lenders in the markets I'm looking, so I have my financing set up, and are you ready for this, over the past week NOBODY has returned my phone calls. Yes, NOBODY!

    I'm staying positive and I keep getting on the phones because I know somebody will want my business, but was hoping others here could share their experiences when they were building teams OOS.

    I'm not even opposed to getting on a plane to visit the markets, set up some meetings and hunt for some properties while in town because real estate is my 100% focus. 

    Suggestions?  

     Is your criteria conducive to the markets these agents are in? Or are you telling them your looking to buy at 70%-80% of market value. 

    For example; we get 100+ inquires a week from out of state investors telling us they have $500k, $1M, $5M etc and they are ready to buy every house we send to them at 70%-80% of market value IN CASH....That's great, so would I and so would everyone else. What is the point of that relationship for the agent?  That is like me telling someone I will trade them 80 cents for every single dollar that they have.

    If you didn't do anything like that then perhaps the agents your talking to are not really into the investment side of the business. Handling out of state investors is dramatically different than working with local home owners. It may just not be their cup of tea.

    3Reply
  • Ryan Evans
    Rental Property Investor · Cleveland, OH · Member since 2016 · 653 posts · 769 votes
    9y

    James makes a very good point. There are a  lot of tire kickers in the out of state investing game. I'm not saying you're one of them at all. But I meet someone every other day in the coffee shops out here in Seattle who say they want to invest out of state. The conversation usually goes along the lines of:

    Me: So what all have you done about getting a property out of state?

    Them: Well, nothing. But if someone does all the work for me and puts an amazing deal in front of me I'd consider it, maybe. 

    Me: Cool, well good talk. 

    I'd recommend picking a long weekend, buying flights, and then in time up until you leave start lining up interviews with agents. When you have a date in the calendar and you can send them a handful of properties to show you, they'll likely start taking you much more seriously. I'd find some investors on BP who will show you around their properties so you can get a feel as well. And I'd head to home depot at 6am on Monday morning and go talk to/get numbers of all the contractors you see. Those are the ones you want on your team for when the time comes. 

    Even after being out there for a weekend you'll at least have a feel for what you're looking at when you're back in Cali. Google street view can be misleading!

    3Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    9y

    Hey Jeff! Well, my guess would be that either a) a lot of the agents know squat about investments so don't have a lot to offer, but more so my bigger guess is b) they may not think someone calling from out-of-state is really a viable sale, at least viable enough to make their efforts worth it. Maybe I'm wrong on both, but those are my first thoughts.

    What kinds of properties are you ultimately wanting to buy? Any locations in particular? 

    0Reply
  • Jeff Petsche
    OP
    Real Estate Broker · Yorba Linda, CA · Member since 2017 · 154 posts · 114 votes
    9y

    @James Wise Thanks for the comment and in NO WAY did I come across in the manner in which you described. Because we all work for the same umbrella company, the conversations were very professional and respectful in every way.

    I think it's the latter of your comment. I think these agents are either talking themselves out of the fact that there are deals out there to be made, you just have to look under a lot of rocks to find them. I know some have given into the fact that the areas are saturated and too competitive to have a chance at the numbers we are trying to hit, or they just don't have the experience working with OOS buyers who are not paying retail prices.

    I know a few of the agents refused to write low offers because they were worried about insulting the seller/listing agent and damaging their reputation. I respect it, but they are just not the fit for me and my partner.

    0Reply
  • David Faulkner
    Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes
    9y

    Never ask a barber if you need a haircut, Jeff. Lot's of barbers 'round these parts.

    2Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    9y
    Originally posted by @Jeff Petsche:

    @James Wise Thanks for the comment and in NO WAY did I come across in the manner in which you described. Because we all work for the same umbrella company (Keller Williams Realty), the conversations were very professional and respectful in every way.

    I think it's the latter of your comment. I think these agents are either talking themselves out of the fact that there are deals out there to be made, you just have to look under a lot of rocks to find them. I know some have given into the fact that the areas are saturated and too competitive to have a chance at the numbers we are trying to hit, or they just don't have the experience working with OOS buyers who are not paying retail prices.

    I know a few of the agents refused to write low offers because they were worried about insulting the seller/listing agent and damaging their reputation. I respect it, but they are just not the fit for me and my partner.

     Jeff with all due respect it sounds as though you came across exactly as I described in my original comment.

    "too competitive to have a chance at the numbers we are trying to hit"

    Translation; we want to pay less than what everyone else is paying for the same product.

    "buyers who are not paying retail prices."

    Translation; we want to pay less than what everyone else is paying for the same product.

    "I know a few of the agents refused to write low offers because they were worried about insulting the seller/listing agent and damaging their reputation. I respect it, but they are just not the fit for me and my partner."

    Translation; we want to pay less than what everyone else is paying for the same product.

    If not one, but several agents are not calling you back I think it's time to identify what the common denominator is here.  Agents like to make money. You are an agent, who clearly likes to make money. As a fellow agent would you really be excited to work with someone who wants to buy the same product as everyone else, only he needs to get it for a cheaper price? I sure wouldn't.

    Imagine a family comes into your office telling you that they need to move into a 4 bed home in a certain school district. You explain to them that in said school district 4 bed homes comp at $400k. They explain to you that if you can get them one for $320k not only will they buy it they will refer you to their friend who also wants to buy one of these $400k homes for $320k....Sounds pretty ridiculous doesn't it? Would you jump to work with them and anxiously wait for the referral of their friend? Or would you show them the door & work with the family who is ready, willing and able to pay $400k? I think the answer is clear.

    When we talk about the family and the school district it seems so clear and obvious that they would make for a bad client. However when "investors" talk to out of state Realtors about "investment" properties exactly this way, investors don't seem to fathom the idea that they too could be a bad client.

    5Reply
  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    9y
    Originally posted by @Jeff Petsche:

    Hello BP Community. I'm looking for some advise/suggestions regarding building the relationships/teams with boots on the ground in OOS markets.

    I'm a real estate Broker here in Southern California with Keller Williams Realty and investing in my own backyard is just not an option for me at this time. I still run my retail business here, but it's not the best area for buy-hold/cash flow. Just too expensive.

    I am part of several referral groups on Facebook and have success making the initial contact with many other KW agents in various markets, but then that is where it seems to stall. The initial conversations go great, I provide my buy-hold criteria to the agents, I let them know I have $200K in capital to invest with and then NOTHING happens.

    My partner and I are ready to pull the trigger and get our first few deals under our belt, but I'm not getting the deals put in front of me to analyze at this point. I'm doing my own searching online, but when I call to get more information about the property, the rental market, etc. it's dying on the vine.  

    I've also been given some resent referrals for local banks and hard money lenders in the markets I'm looking, so I have my financing set up, and are you ready for this, over the past week NOBODY has returned my phone calls. Yes, NOBODY!

    I'm staying positive and I keep getting on the phones because I know somebody will want my business, but was hoping others here could share their experiences when they were building teams OOS.

    I'm not even opposed to getting on a plane to visit the markets, set up some meetings and hunt for some properties while in town because real estate is my 100% focus. 

    Suggestions?  

     Are you looking at all parts of Ohio? Or just cbus / central OH?

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  • Todd Dexheimer
    Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
    9y

    I have done extensive research in all of the markets you mentioned. I invest out of state and the only way to do it is to fly and meet the brokers. They get a lot of California tire kickers. Once they meet you they will know you are serious. 

    1Reply
  • Jeff Petsche
    OP
    Real Estate Broker · Yorba Linda, CA · Member since 2017 · 154 posts · 114 votes
    9y

    @Ali Boone We are wanting to implement the BRRRR strategy, so Ideally we are looking for "off market" deferred maintenance properties to REHAB and then get it in rent ready condition.

    I think James Wise is correct in his comments about most agents are more willing to work with the "retail buyer" who is willing to pay "retail" pricing NOW, which is not our play here, so I can see why some agent see it as a waste of their time. It's sad, but true because I would hope they would want to build a relationship with an investor who could possibly buy 100's of properties through them over several years, if the relationship and market continue to make sense.

    To me it's about LONG TERM RELATIONSHIPS and VOLUME. Not just us looking to buy a ONE OFF property here and there! 

    In the end, we will work with the right agents OOS and they will be glad they took a chance on us.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @James Wise  good points... however there are deals to be had.. Its like the conversation we had a while back.

    one of my vendors was new to the market and was looking to find a local broker and PM... he got on his horse ( not really a horse) and got his butt up there.. dragged his family with him.. rented a loft in the old bible manufacturing building ( maybe you know it he got the top penthouse LOL I was in it last week pretty cool really)... but in 45 days we have closed over 10 deals that all work for what he wants to do. I spent 5 hours there last week and looked at most of them.. typical C B stuff not war zone by any means.. all need some work.. he has two crews going steady and the PM that we hooked up with rode around with us all day.. but  and this is a big butt we did not fool  around all cash offers no financing needed close as soon as title was ready and the goal is 50 plus this year... and 

    we are 1/5th of the way there in less than two months.. so its not hard to do in the mid west..

    however if your going to have the attitude of the  person that posted.. its not going to happen remotely you need to go there.. Did I need to go to Cleveland, No but i did want to see what I was funding.. My Vender left Orlando to work this market.. and so far for what he wants to do which is drip cash flow it seems like a market like most of the mid west pretty interchangeable and values are backed into by rents  with teh 1 to 1.5% rule basically setting all in price after buying and rehabbing..  Now he got a smoking deal on one property and we bought it closed it rehabbed it and flipped it all since we got there and he made 15k on it flipping it..  and that was after paying me my  funding fees and a brokerage fee to a the broker we are working with.. so that broker got to make a commish selling it and reselling finished product all in 30 days or so... not bad for him.  And it proves that there are still deals to be made with value add there.. I don't think he can recreate that every week but 2 or 3 we closed on it seems he will flip those as well.

    Of course he has me as his funder thats a huge advantage to most ( humbly speaking LOL) so when we say cash we mean cash .. no loans need to happen no appraisals none of that stuff.. we just aim and shoot then duck. 

    So for others in CA to think they can just sit in their office and pull strings they either need to do what my vendor did or they need to get a local partner that can be the face of the operation.  Plus if they need financing thats a huge problem as you know.. OREO brokers don't want to deal with lenders if they can help it they want TRUE cash buyers if they can get those , we are the one's that get fed the deals..  the OP with 200k liquid should be able to snag 3 to 4 deals easy 

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  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    9y

    I think the only realistic way this normally happens systematically is getting on that plane. Once that part is done then more could flow remotely. Still I am surprised no KW connection could not find the perfect investor agent, not a broker that sells to investors but one that is doing this already and or landlording etc in that location. They should have most if not all the vetted team connections needed in place. One thing I have noticed outside of big cities or even just outside of LA...everyone seems to work at a much slower pace. 

    Good luck!

    1Reply
  • Jeff Petsche
    OP
    Real Estate Broker · Yorba Linda, CA · Member since 2017 · 154 posts · 114 votes
    9y

    @Jay Hinrichs and @Todd Dexheimer thanks for the comments. 

    Jay, for what it's worth, I'm not sitting in my CA office just "pulling strings" as you mentioned. I'm trying to make some initial connections, get information about the markets I'm interested in, discuss my strategy with the local experts to see if it is even possible in that specific market and if all sounds promising, then I will be setting up meetings, get on the plane and start buying properties. 

    This is my 100% focus and my business moving forward, besides my small retail business here in CA,  which organically happens through referrals, so I plan on spending whatever rime is necessary in the market(s) I invest. 

    I just spent a week in AZ for this very reason, so traveling to the local markets is not an issue at all. I fly for free, so that's not an issue either. But I'm not going to a random market without doing some research first and hopefully having a few boots on the ground to meet with. These markets aren't just a 60 minute drive away for me, so it needs to make sense and plan out the trip. 

    In the beginning as I get things up and running, I can see myself in various markets half a month if necessary. 

    I have a great support structure here and a passive retirement income from the police department, so I can be gone for weeks at a time to build this business OOS, and everything here still gets handled. 

    0Reply
  • Andy Rumple
    Wholesaler and Real Estate Broker · Indianapolis, IN · Member since 2009 · 438 posts · 293 votes
    9y

    use a good wholesaler or 2.

    0Reply
  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    9y

    I would recommend staying local, getting involved in your real estate networking scene and be consistent every day.  It will take a lot of offers to get a good deal.

    0Reply
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