I have been investing in my local market aggressively over the past few years, however, prices have increased and deals are sparse. I have had offers from investors looking to get into the market, however, with the returns I am getting, I do not want to sell, especially without a sound or comfortable place to reinvest locally. I think it may be a good time to utilize some of my equity to grow, but the best place may be in another market. Any advice on how to set up an info structure to purchase, possibly manage or flip remotely?
Jake, if you invest out of your area are you mostly wanting to flip or hold? If you want to hold you should just buy from a turnkey and pay the little extra padding to get the full service as though you think you will save money, in the long run you will not.
Learning a market you dont live in is difficult unless you spend enough time there to truly learn the areas. You might be better working an affiliate arrangement with a local provider in your new market.
Thanks for the insight Curt,
I remain open to either opportunity...I try to access every property individually. That being said, I am currently holding and renting most of my properties within a 45 mile radius I know very well. Even with all of the research I can do into a new market, it still is not enough if I don't have the people on the ground to manage correctly manage the rehab and or management, I won't make money, so an affiliate arrangement may be a good option.
Thanks again Curt,
Jake, I am in the exact same position you have mentioned. Ive been investing a little over a year now & in this time the housing market has increased by some impressive numbers. While this is a good thing in general, its only hard to find an investment now. I have decided, like you mentioned, to expand into other areas. I have talked to two real estate brokers in two different towns. These brokers are going to do comps on the houses alongside with me, search for bargains, help manage rehab ect. In return they have agreed to sell/manage the house I obtain for they're normal commissions.
I noticed in your bio that you are in Michigan now but have lived in Austin,Tx recently as well. I am in the DFW area and know that the Austin market is still very vibrant. Do you have any associates there that you have already developed a trust level with that you could possibly partner deals with?
BP Podcast 73 talks about this very topic. You may want to listen to it.
The key is to find someone in the market you want to be in and partner with them to invest. They can be the "boots on the ground" and you can offer something they don't (e.g. experience, knowledge, financial acumen, etc.) to form a good, solid team.
You may not know the market but someone on BP surely does. Once you've picked your new market, go find him/her/them and start building the team. (I like the Austin idea.)
Good luck. Post with an update if you move forward.
I'm new to real estate investing, but have lived in the Dallas/Ft Worth area almost my entire life. We didn't experience the bubble a lot of the country did, but we had plenty of predatory lending that occurred. The result is an estimate that a lot of folks here are still underwater on their mortgages and/or the foreclosures haven't peaked here, which creates motivation. That is just one source of opportunity in this area.
Combine that with outstanding job growth, rising home prices and a record low inventory of houses for sell, homes are literally flying off the market, which means well done flips sell fast...really fast...and rental rates are skyrocketing, particularly in certain areas. Those areas are select school districts that provide easy access to work and private school quality education at public school prices! An example, a 2,100 sq ft, 4/2/2 home was cosmetically upgraded, no structural changes and no over the top finishes, just modernizing a home built in 1963. It rented in 2-days, word of mouth, for $2000/mo. They could have gotten $2,500 easy. White collar tenants, signed a 2-year lease and have already improved the home, all because that was the elementary school they wanted.
It's a great market and a great time to be in it. I am way more clear on the market, than I am on the actual real estate investing strategies and structure, but I want to learn and would love to partner with an experienced investor.
I'm curious about the same thing. Looking for a new market for cash flow rentals. I bought rentals in SoCal from 2008-2012 when the market was crashed. Wondering if anyone has had success over the LONG TERM owning a portfolio of houses out of state for cash flow? Any idea of some good locations?
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