Investing out of town? Am I Crazy!?

Question

Hello friends! My name is Bob Lasko and I just joined BP yesterday. I'm amazed at the depth of knowledge on this site. My wife and I fell into the real estate investment game by accident. We own a 3 bed 2 bath brand new ranch single family home in an excellent community in Martinsburg, WV, which is in the fastest growing county due to its proximity to Washington, DC and Baltimore. I was hired by the FAA as an air traffic controller in 2011 and that required us to move to Florida for a couple years. We were able to rent the house out to where we just broke even. The tenant is great! He only calls when something is wrong, pays in certified check every month, and takes care of the place! Even though we aren't cash flowing anything, we are building equity by debt payment and appreciation. Our plan is told hold onto it for another 5 years when we can sell it for a larger gain.

A few months ago, I was lucky to get transferred closer to Martinsburg. We live in a town called Bealeton, VA which is about an hour and 15 minutes from Martinsburg. I started looking in Bealeton for buy and hold deals but since we are close to DC, the prices are too high to support that type of investing. I was discouraged since I have been eager to start investing in rentals for the last five years, but wanted to be settled down before I started. Now that I am settled, I live in an area that doesn't support it. I I have been thinking a lot about investing back in Martinsburg but the distance makes me nervous. Usually I wouldn't consider being that far from our investment, but the market there is super attractive for buy and hold. Another reason I'm considering it is because we have had zero problems in the last 3 years with our tenant in the 3 bed 2 bath rancher. When something needed to be fixed, he would call the repair man and deduct it from his rent. Also, my wife is a stay at home mommy and frequently travels an hour and 15 minutes back to Martinsburg to visit family and would be able to address any "non-emergency" problems the tenants have. Also, my wife has a few people in her family that live in Martinsburg and are contractors who have said they would take tenant "emergency" calls for me. My goal is to have a handful of nice rentals that will be paid off when I retire at 50 (I'm 29 now). I already have a nice retirement from the government so the rentals would just be gravy money. I won't consider leaving my job to be closer to a good real estate market. I love my job, it pays too well and has too many perks for me to leave. I'm looking for comments by people who have done this, who are doing this, or who are thinking about doing this. Please share good experiences and bad ones. Any advice is truly appreciated! Thanks!

A few months ago, I was lucky to get transferred closer to Martinsburg. We live in a town called Bealeton, VA which is about an hour and 15 minutes from Martinsburg. I started looking in Bealeton for buy and hold deals but since we are close to DC, the prices are too high to support that type of investing. I was discouraged since I have been eager to start investing in rentals for the last five years, but wanted to be settled down before I started. Now that I am settled, I live in an area that doesn't support it. I

I have been thinking a lot about investing back in Martinsburg but the distance makes me nervous. Usually I wouldn't consider being that far from our investment, but the market there is super attractive for buy and hold. Another reason I'm considering it is because we have had zero problems in the last 3 years with our tenant in the 3 bed 2 bath rancher. When something needed to be fixed, he would call the repair man and deduct it from his rent. Also, my wife is a stay at home mommy and frequently travels an hour and 15 minutes back to Martinsburg to visit family and would be able to address any "non-emergency" problems the tenants have. Also, my wife has a few people in her family that live in Martinsburg and are contractors who have said they would take tenant "emergency" calls for me.

My goal is to have a handful of nice rentals that will be paid off when I retire at 50 (I'm 29 now). I already have a nice retirement from the government so the rentals would just be gravy money. I won't consider leaving my job to be closer to a good real estate market. I love my job, it pays too well and has too many perks for me to leave.

I'm looking for comments by people who have done this, who are doing this, or who are thinking about doing this. Please share good experiences and bad ones. Any advice is truly appreciated! Thanks!

Ned Carey · Answer

I am in Columbia MD and invest in Baltimore. Many of my properties are close to an hour away. In traffic it could easily be 1 hr 15 min. That is well within a doable range.

Joe G. · Answer

@Robert Lasko

I am active duty military, I have homes in three different states. I interview and vet my PMs very carefully. BP has a great interview sheet on the site for PMs. Know the details of the contract with a PM and the contract the PM makes with the tenant. In three different states the 'normal' is always different. Expectation management is key.

Sam B. · Answer

I have rentals that are a full days worth of air travel away from where I currently work and maintain a residence. There are several members on this forum that are in a similar situation (West coasters investing out East - FL, OH, PA, etc).

You're a long drive away (4 to 8 hrs) from several markets that make great financial sense. Hire a good property manager, manage them closely, stay involved and go for it.

Bill Gulley · Answer

Well, Lima Oscar, check wheels down! I stayed within a 50 mile radius, as my control center, after the first 20 miles of my primary operating area the deals had to be better, I just don't like having property I can't drive by. Now, in the early military years, yes I had them afar under management by someone and just hoped for the best. I suggest you stay in your control zone starting out.

This is BP Control, Gulf Yankee, GCA approach to success, we'll keep you on course, on glide path, cleared for approach, further transmissions need not be acknowledged. On course on glide path, heading to success.... :)

Jean Bolger · Answer

well, once you spend some time reading on this site you'll see that not all tenants are gems, haha! So you'll need to decide if that is something you can deal with.
I currently invest out of state, after landlording/self-managing in my own area for 12 years. So far (early days yet!) I am loving the hands off aspect. I was not a very effective property manager; it is a very specific skill set. I am fortunate to have found a very competent property management company and property with enough cash flow to pay them and all expenses handily. I would never invest at a distance and try to self-manage (that's me- you will hear other opinions here) but I would certainly look at markets where there is plenty of cash flow and you can have the management handled by professionals

Naveen Desai · Answer

Hi Robert,

You seem to be on the right path. After you have done the ground work, You can (& possibly should :) ) invest in out of town properties if it works.

All the properties(4 for now), I have are remote, ( some I havent seen them personally), now you call me crazy, ha?

I have friends who I work with, and a network of crew to help us on a call. Building that network is important. Although a friend of mine is partnered with me in investing and lives in the area of the properties, he does not want to be looking after on daily basis. Therefore we have hired property management company. So in the Urban areas this works well, due to established PM companies.

Now, back on 2006 before Circuitcity closed, I used to live and work in Glen Allen, VA and have visited Martinsburg, WV. Looks like there is nice mall and stuff, so I see it as a nice little town. However I am not sure our strategy of hiring Property Management co, works for you in M'burg WV. Never the less, here is what I recommend:

Talk to the person who does fixes on your house that your tenant calls. Establish a rapport with the person and inquire about his team and professionals who work with him or around him and his references. That way establish a small network of plumbers, electricians, painters, floor personnel. Eventually you will find a General contractor too. Also build and maintain contact with multiple such teams, if possible. You are then ready to acquire as many properties as you can handle. Obviously, you will have to establish an ecosystem around realtors/agents/wholesalers that will help you in the process.

All the best!.

Elizabeth Colegrove · Answer

Also note, that investments have to be bought with 20% down. I personally would make sure you are clearing money because appreciation goes both way.s

Elizabeth Colegrove · Answer

My husband is active duty navy. We own houses all over that I, the wife manage. Yes it can be stressful, BUT so is life :). Personally it works for us, although I personally like to cash flow $200 ish a month. That way it does break even when you have some repairs. This site is great, they have 1%, 2% and 50% rules.

Investing out of town? Am I Crazy!?

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