Should OOS investors work with a local expert (not an agent?)

Flipper/Rehabber · Cleveland, OH · Member since 2016 · 133 posts · 69 votes

I am just wondering if out of state investors/oos investors would find it helpful to work with a local expert that was not trying to "sell" them a property but instead someone who is advising them and letting them know what they are actually buying. I have heard many stories of oos investors buying a property and then figuring out that they purchased a property in a bad area or the area was not as good as they were told. Also, since many oos investors pay cash there is no appraisal done before they buy and they might over pay for it without knowing until they try to sell it. This expert would have a back ground as an agent, appraiser, investor as well as construction. I am located in Cleveland, OH and see the need but curious how others see it.

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Robert Matelski

Rental Property Investor · Austin, TX · Member since 2018 · 214 posts · 270 votes

Originally posted by @John Koster:

@Vince Lucas. There is definitely a need. I know several investors in Los Angeles who might be interested in those services.

This is exactly why I started my website and YouTube channel... to share my Cleveland investment knowledge with others, and give a comprehensive unbiased perspective. When info comes from a broker/PM/lender/anyone-else-who-stands-to-profit-from-OOS-investors-whether-they-win-or-lose, the info is bound to be biased, and I wanted to change that.

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John KosterPro Member
Investor · Valley Village, CA · Member since 2012 · 147 posts · 142 votes
7y
@Vince Lucas. There is definitely a need. I know several investors in Los Angeles who might be interested in those services.
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Ryan Evans
Rental Property Investor · Cleveland, OH · Member since 2016 · 653 posts · 769 votes
7y
I think there is a big need for it. I did this for plenty of investors in Cleveland, basically as a consultant, since I’ve got a background in consulting, light construction and am an investor myself. I don’t pretend to be any kind of expert, but if someone wants to pay me an hourly or flat rate to drive out to a property and give my opinion with nothing else to gain then I’d do it. I’m licensed now so it’s a different story, but I still find myself talking investors out of deals on a weekly basis because they get sent “deals” and they need someone to go look at it. Half the time I’ll see $30k+ in rehab before I get out of the car and the deal is dead already, but You’d never know from afar. So there’s definitely a lot of value in doing what you’re talking about!
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Dan Sarao
Investor · Cape Coral, FL · Member since 2019 · 135 posts · 41 votes
7y
If you can find a realtor who is investment oriented and objective and truly is not a salesman than that is a good place to Start. These are needles in the haystack, but they do exist. I can refer both realtors and property managers that can act in this capacity.

Other than that this sounds like it would be a reasonable service. Think about your business model and the fee structure. Might be a viable service, especially for Cleveland.
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Lee RipmaPro Member
Rental Property Investor · Prairie Village, KS · Member since 2015 · 2k+ posts · 2k+ votes
7y
@Vince Lucas
The service I most see wanted from OOS investors is a project or asset manager to oversee repositions. Light rehab a PM company can usually handle but the big ones are tough. Even the best GC needs oversight. So check out a deal service for a flat fee would work but also think about that other piece and if you’re able to offer it. Agents get a bad rap for putting people into bad deals but I really think that it’s the responsibility of the investor to vet their own deal. Agents will close transactions and negotiate but they really just do what the investor wants. If the investor doesn’t know what they want it seems a bit unfair to blame the agent!
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Robert Matelski
Rental Property Investor · Austin, TX · Member since 2018 · 214 posts · 270 votes
7y
Originally posted by @John Koster:
@Vince Lucas. There is definitely a need. I know several investors in Los Angeles who might be interested in those services.

This is exactly why I started my website and YouTube channel... to share my Cleveland investment knowledge with others, and give a comprehensive unbiased perspective. When info comes from a broker/PM/lender/anyone-else-who-stands-to-profit-from-OOS-investors-whether-they-win-or-lose, the info is bound to be biased, and I wanted to change that.
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Michael Noto
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
7y
@Vince Lucas I could see the need for this for people investing out of state for sure. I think being a licensed agent is important so you can gain access to properties easier and also knowing the ballpark costs for renovations. This would help people a lot.
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Brandon Bartlett
Investor · Cleveland, OH · Member since 2014 · 3 posts · 3 votes
7y
@Robert Matelski can you provide your website link? I would like to check that out.
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Tom Ott
Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
7y
Originally posted by @Vince Lucas:
I am just wondering if out of state investors/oos investors would find it helpful to work with a local expert that was not trying to "sell" them a property but instead someone who is advising them and letting them know what they are actually buying. I have heard many stories of oos investors buying a property and then figuring out that they purchased a property in a bad area or the area was not as good as they were told. Also, since many oos investors pay cash there is no appraisal done before they buy and they might over pay for it without knowing until they try to sell it. This expert would have a back ground as an agent, appraiser, investor as well as construction. I am located in Cleveland, OH and see the need but curious how others see it.

It probably just depends on what you are doing. If you are looking to buy a Turnkey investment, you'd want to work with a provider, and not just some expert giving advice. If you are doing things alone, then an expert would be good.
I always suggest doing research on the neighborhood and getting an appraisal done, even if you are buying in cash.

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Vince Lucas
OP
Flipper/Rehabber · Cleveland, OH · Member since 2016 · 133 posts · 69 votes
7y
@John Koster Feel free to send them my way.

@Ryan Evans Interesting. Would like to talk more.

@Dan Sarao Is hard because an agent wants to sell you something or they do not make any money and are just spinning their wheels.

@Lee Ripma I can see that as well. The issue with that is that it can be a lot of work for the boots on the ground to manage it. If investor is willing to make it worth the local's time then I can see something coming from that.

@Robert Matelski What is your channel?

@Michael Noto Agreed.

@Tom Ott I am saying that if someone is buying a turnkey investment they should consult with someone to give them additional information/point of view so they know what they are getting in to before they buy.
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Ryan Heywood
St. Helena, CA · Member since 2016 · 147 posts · 59 votes
7y
@Vince Lucas my work owns several vineyards. We outsource the management to a farming company, but we also employ a third party consultant to periodically verify everything and give a second opinion. It’s extremely valuable, especially when your try to use systems and outsourcing. This concept applied to OOS investing would be great, not only at the purchase but also during projects or checks on the units.
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Jabari Long
Real Estate Broker · Detroit, MI · Member since 2014 · 384 posts · 149 votes
7y
That non agent or agent who isn't trying to sell his or her own listing is an independent third party which is very valuable. I've had OOS work with me simply because I am knowledgeable and wasn't trying to shove specific properties down their throat. You have to make sure the people who you're working with have interest that are aligned.
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Vince Lucas
OP
Flipper/Rehabber · Cleveland, OH · Member since 2016 · 133 posts · 69 votes
7y
@Ryan Heywood I am glad you see the value. I am just surprised that a lot more investors are not actively searching for it.
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Nic S.Pro Member
Danville. CA · Member since 2017 · 313 posts · 221 votes
7y
@Vince Lucas wouldn't a good property manager be this person? OOS investors need people to manage for them, a good PM can accurately inform buyers on area to buy/not to buy - rental rates, vacancy rates, rehab costs etc... I emphasize GOOD here because there can be some sketchy PM - just like there could be sketchy consultants as well.
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Nic S.Pro Member
Danville. CA · Member since 2017 · 313 posts · 221 votes
7y
I'm an OOS investor and I did 1)3rd party inspection 2)3rd party appraisal on my properties. You would be willfully ignorant to not do either of these when buying OOS especially with all cash IMO.
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Lee RipmaPro Member
Rental Property Investor · Prairie Village, KS · Member since 2015 · 2k+ posts · 2k+ votes
7y
@Vince Lucas
I agree. I structure my out of state deals with a local partner. They oversee the rehab and often do the property management as well. So equity is an option for that oversight. However, an independent project manager or asset manager who makes the rehabs happen is also valuable. I think that is what folks are often looking for but hard to find. It's hard to find because that person has to be compensated for their work. I pay in equity, source deals, and get loans/refis. I think a lot of people wish they had this person without the equity, however, that can be tough to find!
Podcast Guest on Show #373
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Robert Matelski
Rental Property Investor · Austin, TX · Member since 2018 · 214 posts · 270 votes
7y
@Brandon Bartlett - I will shoot you a message on here with the link

@Vince Lucas - The channel is called Cleveland Investor Primer
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Vince Lucas
OP
Flipper/Rehabber · Cleveland, OH · Member since 2016 · 133 posts · 69 votes
7y
@Nic S. Property management is a very tough job. They have a lot of different tasks that going into MANAGING a property. Yes, property managers can provide some insight. Can you recommend a GOOD PM?

@Lee Ripma Glad you found something that works. I managed projects before but it become a lot of work and investor did not want to pay a fair rate when I pretty much did everything from start to finish.
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Corby GoadeBusiness Member
Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
7y
This almost comes off as a rhetorical question, though I know you are looking more for the nuance of this. I work exclusively with out of state investors and I have no idea how someone would go about this otherwise. I have clients come to me consistently because they've tried to manage an investment from out of state and have no boots on the ground. In every market there are unlimited, essentially free resources. So many investors, agents and property managers that are happy to help, give free advice and get people up to speed. I've never regretted helping an investor- it often turns in to opportunity for me, but every time I learn something and it makes me a better investor. Always find a local expert- it doesn't have to be costly- quite the opposite.
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Tom Ott
Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
7y
Originally posted by @Vince Lucas:
@John Koster Feel free to send them my way.

@Ryan Evans Interesting. Would like to talk more.

@Dan Sarao Is hard because an agent wants to sell you something or they do not make any money and are just spinning their wheels.

@Lee Ripma I can see that as well. The issue with that is that it can be a lot of work for the boots on the ground to manage it. If investor is willing to make it worth the local's time then I can see something coming from that.

@Robert Matelski What is your channel?

@Michael Noto Agreed.

@Tom Ott I am saying that if someone is buying a turnkey investment they should consult with someone to give them additional information/point of view so they know what they are getting in to before they buy.

Of course! If I was investing in a new market, I would listen to the TK provider, but I would also ask other investors what they think of that particular area as well. Experienced investors may also know what areas give good returns as well.
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Lee RipmaPro Member
Rental Property Investor · Prairie Village, KS · Member since 2015 · 2k+ posts · 2k+ votes
7y
@Vince Lucas
Unfortunately people often want something for nothing and don’t value the people who are doing the work. So maybe it’s not that they can’t find anyone to manage the project it’s that they want project management without fair compensation!
Podcast Guest on Show #373
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Account Closed
Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes
7y
Originally posted by @Vince Lucas:
I am just wondering if out of state investors/oos investors would find it helpful to work with a local expert that was not trying to "sell" them a property but instead someone who is advising them and letting them know what they are actually buying. I have heard many stories of oos investors buying a property and then figuring out that they purchased a property in a bad area or the area was not as good as they were told. Also, since many oos investors pay cash there is no appraisal done before they buy and they might over pay for it without knowing until they try to sell it. This expert would have a back ground as an agent, appraiser, investor as well as construction. I am located in Cleveland, OH and see the need but curious how others see it.

Yes.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Ryan Heywood:
@Vince Lucas my work owns several vineyards. We outsource the management to a farming company, but we also employ a third party consultant to periodically verify everything and give a second opinion. It’s extremely valuable, especially when your try to use systems and outsourcing. This concept applied to OOS investing would be great, not only at the purchase but also during projects or checks on the units.
do you use Renteria by chance Sal is a good friend.. we were neighbors at Silverado.. talk about an American success story.. comes from Mexico as a Barber now lives in a mansion on top of Silverado.. his did not burn down.. Moones did though..
I think the issue with this will be getting people to actually pay you.. or pay you enough to make it worth the effort and liability.. One would need some very iron clad hold harmless agreements.. reason being these things fall down at the tenant level.. and of course investors shoot them selves in the foot every day.. thinking they can take low end C class and run it better and profitable from afar..

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Ryan Heywood
St. Helena, CA · Member since 2016 · 147 posts · 59 votes
7y
@Jay Hinrichs we use an outfit called Oak Knoll. It’s truly impressive to see how some of these guys get in and grind on the vineyard management, the work can be pretty brutal. The problem now is finding people, which is great for the workers as it’s slowly but surely driving up their wages. Unfortunately nowhere near close enough for them to afford a decent living situation in the valley. That 150 dollar bottle of cab isn’t going to pick itself.
1 Reply
Kent Ritter
Investor · Indianapolis, IN · Member since 2019 · 62 posts · 64 votes
7y
@Vince Lucas there is definitely a need. I’ve helped multiple OOS investors from California get there footing in Indianapolis. It’s almost impossible to beat our local investors without someone local with knowledge and the relationships to get the quality deals.
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Federico Gutierrez
Realtor · Cleveland, OH · Member since 2015 · 2k+ posts · 857 votes
7y
Wait a second here, @Vince Lucas aren't you a Realtor working for the Century 21 Homestar team?

A Realtor's fiduciary obligation is towards their client. Sure there are a few bad ones in every market BUT they don't last in the long run. Then there's also the Ethics of being a Realtor, which if they uphold should cover everything you stated.

Some Realtors are market experts (key word some) and I don't know how you're going to compensate any market expert to answer all the phone calls from OSS investors just to pick their brain. One person can only drink so much coffee, as that's the go to line "let me take you out for coffee"

I think @Lee Ripma summed it up perfectly. Realtor/Agents just do what their client tells them to.
BTW this borders on the side of you advertising your services passively IMO, probably best served on the Marketplace
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