Las Vegas, NV · Member since 2013 · 4 posts · 0 votes
Hi,
My name is Farah and I'm a newbie from Vegas. I have one SF home in Vegas and I'm in the process of buying another SF in Phoenix. My job keeps me traveling so I don't really live anywhere. I've been looking at different markets but my question is should I stick to one area? Or buy all over? I'm just starting out so any advice would be great.
I am not very experienced at multiple state property owning, but I am avidly pursuing investing out of state due to the poor return rates in my area. My biggest obstacle is assembling a team to handle acquisition, and property management. If you have to create a new team for every location it could be tough.
The advantage of having properties in multiple states is diversity. If a local economy goes bad hopefully it will not effect the other areas you own in.
Thanks for responding! I agree with you that having to assemble at eam in each location would be tough. I have a property manager in Vegas right now and I hate to loose to 10% a month in profit.
I think the "should I invest out of state" question has been debated many times on Bigger Pockets. The main arguments for it is getting a higher return than in the home market and if you want to be hands-off anyway, it really doesn't matter where you invest. One argument against it is that you should invest in your own backyard and just make it work.
Welcome to BP! As a newbie you may want to concentrate your efforts on a small number of markets. As you learn, you can duplicate the good things in other markets.
We own 4 houses in 3 different states. I manage them all myself. My husband is in the military so we buy personal residents in every area that makes sense. Some areas make more sense to buy investments than other. Those areas we invest in, others are just personal properties.
Property managers go to IREM.org search for ARM certified <50 units, CPM certified >50units.
Property Inspectors go to ASHI.org search for certified.
Other team members check out 3 different local REIA clubs ask for referrals, when you hear the same names over and oer they are probably good.
You want the best of the best. Instead of looking at loosing 10% profit by having a PM consider the benefit of not sleeping with the golden plunger. You time is far too valuable looking for the next deal.
I also believe that you can successfully invest out of state as long as you have a strong team and good management. I have 3 out of state properties (1 in WA state, 2 in FL), and 2/3 are managed. I semi-manage the 3rd, though I fell into a very lucky situation that effectively I have property management without the cost.
I say to go where the numbers make sense. If they make sense at home, then invest locally; if not, then find a place they do. I do concur with the above comments to stick with only a few markets though. I also recommend always budgeting for management fees, even if you end up managing them yourself. That way, you could eventually pull yourself out of management and not destroy your cash flow.
On a side note, I am an agent in Phoenix and would be happy to talk to you about the area if you are interested. Prices are shooting up, so we're not AS attractive of a cashflow market as we were, but there are definitely still opportunities.
Hello again. I agree with you both but I have one question. You both talk about a great team and great management. I undertand the management portion. But what qualities and personnel make a great team?
Glad to hear that you want to ramp up your real estate investing. It's a great time to be building your real estate portfolio.
I don't recommend spreading yourself around too many markets. I would focus on the ONE market that best fits your current investment goals and criteria. Then diversify into other markets as you build your portfolio.