Rental properties out of state

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Rental properties out of state

Andy Ramdeen
New York, NY · Member since 2018 · 86 posts · 29 votes

Hey everyone , my name is Andy . I live in NYC , Queens

I was looking into rental properties but I was looking at Florida properties. I was just wondering , how do you guys feel about buying a rental property in another state and having a property management company handling your day to day activities. Also how do I know if I can trust a property management company? And if anyone lives in flordia that can point me to a great management company and some good rental properties that would be great .

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Clayton MobleyPro Member
Birmingham, AL · Member since 2014 · 875 posts · 947 votes
7y

@Andy Ramdeen If you are wanting to buy from the same company that manages the property - and I assume not be doing any rehab work since you are at a distance and don't have contacts - then you're looking at turnkey, my friend. One company does everything - finds properties, rehabs them, updates things like roofing and HVACs etc, sells to investors, finds tenants, and manages the property long-term. 

If that sounds like the type of investment you are looking for, then you should start looking into turnkey companies in Orlando if that's the market you want to invest in. Make sure they are full-service - meaning they actually do everything in-house, rather than selling you a property and then passing you off to a 3rd party management company you didn't vet. 

Turnkey is a popular investment for folks who are priced out of their own market (like NY), but you need to do the legwork to ensure you go with a quality outfit. I agree with others here who have said it's a good idea to fly out to Orlando. Once you have an idea of who you want to work with (vetted and narrowed down to one or two providers) fly out and meet them, take a look at their inventory, drive around those neighborhoods at night, etc. It's an investment in your investment that will pay off big time in peace of mind, and it's still the best way to suss out scammers and 'too good to be true' claims.

A few other tips for investing in turnkey:

  • You only close after rehab and inspections, a full-service turnkey company takes on the risk of rehab. Those 'pay to play' TK/BRRRR 'hybrid' outfits are basically letting you pay to take on risk you don't need.
  • They should provide an appraisal and obviously have the place inspected after rehab, but also be fine with you getting your own 3rd party inspection and appraisal. If they balk at that, walk away.
  • While you won't need a lot of updates during the rehab process or after a tenant is placed unless something goes wrong, you should be able to communicate with your team and have access to all your investment docs, leases, contracts, billing activity, etc. An online portal is best, but at the very least they should send you statements and check in once a month.
  • If a company won't accept traditional financing or requires cash-only investments, I'd move along. Opinions differ on this, but to me, a company that requires cash has a liquidity problem that could be indicative of issues higher up the food chain in their business model. This is also a common trait of so-called 'turnkey' scammers like Morris Invest where they give you the 'LAST PROPERTY EVER ACT NOW' run around and make you sign a contract via email without having time to vet the property. Which leads me to:
  • Don't waste time with used-car salesman tactics or false-scarcity manipulations. There will always be real estate, buyers and sellers and investors and tenants. If someone tries to convince you that you need to hand over money without being able to run your own numbers or AT LEAST see photos, it's time to move on.
  • I'll say it again: GO VISIT! You should be able to see the city, tour the neighborhoods they invest in, see some properties to get a feel for the quality of the rehab work, etc. These people are going to BE your investment, so make sure you gut-check your decision. Once you've done this, a successful investment can turn into a portfolio without much additional legwork, so put in the time to make sure you're going with someone who will be around for the long-haul.

Good luck!

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  • Charles Carillo
    Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes
    7y

    Hi Andy,

    Where are you looking in Florida? How many units are you targeting?

    3Reply
  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    7y

    @Andy Ramdeen

    Investing out of state and having a property management company deal with the day-to-day activities is a strategy many investors employ.

    You have to be more specific when you mention investing in Florida. Florida is a big state. You may get more feedback if you mention which city you plan to invest in. A property management company in Miami may not also management property in Orlando.

    [email protected]917-280-8544
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    1Reply
  • Andy Ramdeen
    OP
    New York, NY · Member since 2018 · 86 posts · 29 votes
    7y

    @Charles Carillo in Orlando area , and just one unit for now . Do you know anyone or recommending anyone ?

    0Reply
  • Andy Ramdeen
    OP
    New York, NY · Member since 2018 · 86 posts · 29 votes
    7y

    @Basit Siddiqi that’s very true , sorry for the misguided information, I’m looking to invest in Orlando

    0Reply
  • Steve Kontos
    Investor · Great Neck, NY · Member since 2016 · 679 posts · 467 votes
    7y

    @Andy Ramdeen

    When investing out of state it's about having a good system in place both here and the state you are investing in.  That system can only work with a good team.  With that being said, you need to build contacts in the area your interested in.

    1Reply
  • Andy Ramdeen
    OP
    New York, NY · Member since 2018 · 86 posts · 29 votes
    7y

    @Steve Kontos how would I build contacts in that area if I don’t know anyone in that area ?

    0Reply
  • Andrew C.
    Investor · Forest Hills, NY · Member since 2014 · 101 posts · 52 votes
    7y

    Why did you choose Orlando?  Have you done research to see what type of returns you will get and do you know specifically what parts of Orlando you are targeting?  I'm sure there are plenty of investors from the Orlando area here on BP so you should definitely check out those forum threads and make those connections.  Obviously you have to do your due diligence too as this is the internet! 

    Some people who are new to investing look to "turnkey" companies so you can look into that as well.  I heard on The Real Estate Guys podcast talk about a turnkey company in Orlando called Greater Orlando Homebuyers so you can check them out too.  I don't know anything about them so this is not a recommendation.  Good luck! 

    1Reply
  • Zach Hoereth
    Rental Property Investor · Indianapolis, IN · Member since 2017 · 96 posts · 140 votes
    7y

    @Andy Ramdeen I would certainly recommend connecting with other individuals that are investing in Orlando. If you have the time, consider visiting your target market. Before visiting though make contact with lenders, brokers, property managers, etc and plan to meet with them in person. I work with multiple folks who invest out of state and tend to have better luck actually visiting their target market in person. Cheers!

    1Reply
  • Account Closed
    Rental Property Investor · Dallas, TX · Member since 2019 · 2 posts · 3 votes
    7y

    @Andy Ramdeen

    I have rentals in TN and I live in Texas. I use Remax as a property management company and I have for the last 4 years. Until you make contacts you can utilize any major real estate company that provides that service.

    2Reply
  • Andy Ramdeen
    OP
    New York, NY · Member since 2018 · 86 posts · 29 votes
    7y

    @Andrew C. Thank you so much for this ! I am definitely looking into Orlando property more in depth now . But thank you for the advice

    0Reply
  • Andy Ramdeen
    OP
    New York, NY · Member since 2018 · 86 posts · 29 votes
    7y

    @Zach Hoereth thank you , yeah your right I would have to connect with different people that live and invest in Orlando . That’s a valid point I would definitely take this advice and use it

    0Reply
  • Andy Ramdeen
    OP
    New York, NY · Member since 2018 · 86 posts · 29 votes
    7y

    @Taylor Osu thank you so much , did you find the properties on your own or did you purchase them through the property management company?

    0Reply
  • Account Closed
    Rental Property Investor · Dallas, TX · Member since 2019 · 2 posts · 3 votes
    7y

    @Andy Ramdeen

    I found the property on my own and utilized them on the back end

    1Reply
  • Adeva Edobor
    Banker · Huntington Beach, CA · Member since 2018 · 99 posts · 100 votes
    7y

    @Andy Ramdeen call a few real estate firms around your property, be nice on the phone to whoever you talk to and ask for a referral to a property manager. They have nothing to lose or gain, so they'll be unbiased with the recommendation. Do that with a few then look at reviews of the management companies and pick one.

    2Reply
  • Andy Ramdeen
    OP
    New York, NY · Member since 2018 · 86 posts · 29 votes
    7y

    @Taylor Osu oh that’s good , I was thinking about finding a property management company that offers properties for sale and buy through them .. any thoughts on this ?

    0Reply
  • Andy Ramdeen
    OP
    New York, NY · Member since 2018 · 86 posts · 29 votes
    7y

    @Adeva Edobor great advice im definitely gonna do that

    0Reply
  • Clayton MobleyPro Member
    Birmingham, AL · Member since 2014 · 875 posts · 947 votes
    7y

    @Andy Ramdeen If you are wanting to buy from the same company that manages the property - and I assume not be doing any rehab work since you are at a distance and don't have contacts - then you're looking at turnkey, my friend. One company does everything - finds properties, rehabs them, updates things like roofing and HVACs etc, sells to investors, finds tenants, and manages the property long-term. 

    If that sounds like the type of investment you are looking for, then you should start looking into turnkey companies in Orlando if that's the market you want to invest in. Make sure they are full-service - meaning they actually do everything in-house, rather than selling you a property and then passing you off to a 3rd party management company you didn't vet. 

    Turnkey is a popular investment for folks who are priced out of their own market (like NY), but you need to do the legwork to ensure you go with a quality outfit. I agree with others here who have said it's a good idea to fly out to Orlando. Once you have an idea of who you want to work with (vetted and narrowed down to one or two providers) fly out and meet them, take a look at their inventory, drive around those neighborhoods at night, etc. It's an investment in your investment that will pay off big time in peace of mind, and it's still the best way to suss out scammers and 'too good to be true' claims.

    A few other tips for investing in turnkey:

    • You only close after rehab and inspections, a full-service turnkey company takes on the risk of rehab. Those 'pay to play' TK/BRRRR 'hybrid' outfits are basically letting you pay to take on risk you don't need.
    • They should provide an appraisal and obviously have the place inspected after rehab, but also be fine with you getting your own 3rd party inspection and appraisal. If they balk at that, walk away.
    • While you won't need a lot of updates during the rehab process or after a tenant is placed unless something goes wrong, you should be able to communicate with your team and have access to all your investment docs, leases, contracts, billing activity, etc. An online portal is best, but at the very least they should send you statements and check in once a month.
    • If a company won't accept traditional financing or requires cash-only investments, I'd move along. Opinions differ on this, but to me, a company that requires cash has a liquidity problem that could be indicative of issues higher up the food chain in their business model. This is also a common trait of so-called 'turnkey' scammers like Morris Invest where they give you the 'LAST PROPERTY EVER ACT NOW' run around and make you sign a contract via email without having time to vet the property. Which leads me to:
    • Don't waste time with used-car salesman tactics or false-scarcity manipulations. There will always be real estate, buyers and sellers and investors and tenants. If someone tries to convince you that you need to hand over money without being able to run your own numbers or AT LEAST see photos, it's time to move on.
    • I'll say it again: GO VISIT! You should be able to see the city, tour the neighborhoods they invest in, see some properties to get a feel for the quality of the rehab work, etc. These people are going to BE your investment, so make sure you gut-check your decision. Once you've done this, a successful investment can turn into a portfolio without much additional legwork, so put in the time to make sure you're going with someone who will be around for the long-haul.

    Good luck!

    5Reply
  • Steve Kontos
    Investor · Great Neck, NY · Member since 2016 · 679 posts · 467 votes
    7y

    @Andy Ramdeen

    As always on BP, a lot of great folks here gave you great answers!  Best of luck and keep in touch.

    0Reply
  • Andy Ramdeen
    OP
    New York, NY · Member since 2018 · 86 posts · 29 votes
    7y

    @Clayton Mobley I cannot say how much I needed this , this will make me really think a lot of choosing these kind of companies . And what to look out and not for , thank you so much for this

    1Reply
  • Andy Ramdeen
    OP
    New York, NY · Member since 2018 · 86 posts · 29 votes
    7y

    @Steve Kontos thank you , yes I really got some great advice

    0Reply
  • Tom Ott
    Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
    7y
    Originally posted by @Andy Ramdeen:

    Hey everyone , my name is Andy . I live in NYC , Queens

    I was looking into rental properties but I was looking at Florida properties. I was just wondering , how do you guys feel about buying a rental property in another state and having a property management company handling your day to day activities. Also how do I know if I can trust a property management company? And if anyone lives in flordia that can point me to a great management company and some good rental properties that would be great .

    Feel free to private message me

    Thanks

     Investing OOS is a great way to earn passive income. Many investors do it if they live in a market that does not cash flow, or they find great deals in less costly markets. For examples, places in the Midwest have such low prices but higher rents that meeting that 1% or even 2% rule is rather easy. 

    1Reply
  • Andy Ramdeen
    OP
    New York, NY · Member since 2018 · 86 posts · 29 votes
    7y

    @Tom Ott what other areas would have that kind of return if you don’t mind me asking

    0Reply
  • Tom Ott
    Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
    7y
    Originally posted by @Andy Ramdeen:

    @Tom Ott what other areas would have that kind of return if you don’t mind me asking

     Some of the more untapped cities, such as Cleveland, Cincinnati, Pittsburgh etc. 

    1Reply
  • Erwin Vargas
    Member since 2019 · 4 posts · 7 votes
    7y

    Hi Andy, (and all in the chat). As you can see, you have been provided with excellent and useful information when it comes to investing out of state. This will prove very valuable to you, I am sure. If you are set in the Orlando area (or nearby cities) I can tell you based on experience that cities such as Winter Heaven, Davenport, Lakeland, among others, do offer great properties at excellent value and great investment return, especially when looking for turnkey properties.

    0Reply
  • Jeremy Marek
    Evergreen Park, IL · Member since 2016 · 138 posts · 59 votes
    7y

    @Andy Ramdeen I'd recommend you do your first deal locally in your area. That way you can build your systems and learn the ropes before investing out of state. Not to say you can't go straight for out of state, but it is always easier to network and learn when it's close to home

    0Reply
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