Hi BP, I've been lurking through this site for about a year, finally decided to join in. I'm excited to keep learning from you!! I'm mainly interested in buy and holds. We have a few SFH in Utah and one we are are financing in OR. My goal is to earn $100k/ year in rental income by 2020. I'm looking at SFH, multi units, mobile home parks, just about anything with a good, stable return. The idea of investing out of state has become more and more attractive lately so I guess I'm location agnostic.
Welcome, @Alison Kovac ! Real estate is the best, and I think that there are many ways to achieve financial freedom through real estate investing. Sounds like you already have a very good start! Do you manage the single family rentals yourself? How has that been for you?
Hi @Alison Kovac , I'm in the same boat as far as looking for out of state properties as well; prices where I am currently are quite obnoxious currently!
Welcome, and happy learning!
@Skyler Smith yes, so far I've been managing them myself. Huge learning curve to be sure but so far so good. I would like to get to the point where I hand it over to a management company. Strangely, I actually enjoy the direct interaction with the tenants.
Hi Alison, Good to see you here! And welcome. As a client, you can always call me. But I do want to provide just this bit of information.
Nearly every "really bad" deal that comes across my desk stems from investing out of state. Seriously. As a lawyer, I'm only brought in on the bad deals. And there are good experiences, too. But it is a much more difficult process when you can't personally oversee your investments. I generally tend to advise away from doing so. But, I don't want to rain on your parade either. So just some tips.
Be very careful about partnering with someone there. This is where most investors get scammed. Because it's out of state, investors almost have to seek someone local to work with. Be careful and choose wisely.
Thoroughly vet any one you do business with, just like your tenants--criminal, BK, credit reports! If you can make it out there, network in the REIAs and talk to others about potential partners.
Do a double blind comparison: Work two people at once and don't inform one about the other to get two different opinions on a particular deal. Like two agents, for example, to see if one is over inflating the numbers.
Don't jump into a big project or multiple projects. It's easier to walk away from one bad property than 10.
Have proper documentation for every transaction, every detail in writing. And make every transaction independent of the rest. The more you commingle with the partner, the more difficult any one issue is to prove.
Hold partner accountable every day. If there is even an inch of impropriety, you can bet there will be more. And it will be much more difficult to extricate yourself.
Have an independent party on your side. A title co. RE agent or PM. Attorney. That only works for you. Always demand ALL paperwork from every transaction from the closing company itself. Pay an agent to swing by house to check on it.
I'm sure there are more tips. But happy investing!
Jeff, you're the best! And rest assured, I was going to contact your office before investing out of state. Thanks for taking the time to reach out. I'd prefer to stay in state. BUT living where I do, I feel like I'm driving to Kentucky all the time anyway...
Thanks again for posting and for your advice. We'll be in touch!!
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