San Francisco, CA · Member since 2018 · 13 posts · 5 votes
I am just getting started in out of state investing and wanted some advice from those in the game already. I am looking to build a cash flow portfolio and am vetting the following markets:
- Cleveland
- Cincinnati
- Indianapolis
1. How reliable is property management for an out of state investor?
2. Do I need a local lender?
Any other tips would be appreciated for grading these markets (besides what is on BP) or finding a strategy. Right now, I am looking at multifamily in B neighborhoods in these cities.
1) Property management is a critical element, and some are much better than others. Make sure you vet thoroughly and don't depend on any PM 100%. You have to manage the managers. Nobody will look after your property as well as you.
2) No, you can use any lender that lends in the state your investing in, but not necessarily a lender that is local. Be sure to check for pricing including fees, points, as well as interest rates. As well as the lender's experience with working with investors, and avoid Wells Fargo and some of the other big boys.
Our insurance rates are just higher than other places in the country. I factor at 1% of the purchase price annually when running performance evaluations. Other than that the impact you'll see is wear and tear on your roof. So in other markets, you can keep a roof for 30 years, but in ours, I factor 10. Just make sure to get a deductible you're comfortable with spending every 10 years and you're good to go!
I will be interested in getting deal from you, but first working on putting team in place.. like good property manager,( Not necessary big company) contractor and handyman..