Seeking Mentor - Long Distance Investment & First Rental Property

6 Replies

Hi BP community!

My wife and I purchased our first property together in Lima, Peru in October, 2020. We live and work here as teachers, are living in the apartment now and hope to rent it our after we leave in the next few years. I am seeking advice, tips, recommendations on where to start, and guidance with the process. I know that's asking a lot!

It's funny, but I am more intimidated buying a property back in the United States than I was buying property in Peru, a developing country, with less competitive interest rates, AND with the language barrier!

Here's where we are at:

Our goal is to purchase several rental properties over the next couple of years (single family and multi-family), and ultimately to produce passive income through cashflow. We both have great credit scores, money for a downpayment, and are dedicated to working towards our goals.  

We would like help in identify areas (open to all locations) to invest with a purchase price of 250,000 or under for a first property. 

For distance investors who have done this before, I have these questions:

-What areas are you targeting and why?

-What systems and tools helped you to achieve success?

-What pitfalls should we try to avoid?

-What recommendations do you have?

Many thanks for any guidance you can provide.

Happy Investing!

Hello Shaun. I would love to help you out. I love Latin America and I'm fluent in Spanish. I'm going to Colombia next week for vacation. Maybe we can hop on a call and I can talk with you about OOS investing? In my market you can easily find good properties for under $250,000 that cash flow well. I'll message you :)

-What areas are you targeting and why?

Columbus OH in the below neighborhoods. Gentrifying areas with strong appreciation and cashflow, that have some external stimulus for growth.

-What systems and tools helped you to achieve success?

Find the right team members and don't lose hope. A lot of investors burn out looking for deals. It's hard but worth the effort. A great real estate agent specializing in investment property is a must. With out the deal nothing matters.

-What pitfalls should we try to avoid?

Over analyzing, reading bigger pockets articles from 5 years ago, etc. The market is competitive, I work with a lot of real estate investors that are stuck with book knowledge but that info doesn't apply anymore and it keeps them from buying that first deal. 

-What recommendations do you have?

Identify a market and jump in with a real estate agent. The rest will fall together with the right agent, they will help with lenders, PM, contractors, etc.

@StephenBrown - thanks for the add and for putting Toledo on my radar. It would be good to connect.

Colombia is great! I visited some cities there with my wife last January - Bogota, Cartagena, Medellin, each one is so different, you will have a great time!

Originally posted by @Brandon Goldsmith Goldsmith:

I would suggest narrowing down what your goals might be for investing in the US and that will help you identify some possible target market. As for investing in Peru, how was that process? @Shaun Schaller

Thanks Brandon, solid advice! 

What criteria would you identify as most important when finding a market with the goal of generating cash flow from a portfolio of small multi-family properties? What do you think draws people to invest in your market in Columbus? BTW, I reached out to your colleague @Reece Iovine to learn more about Columbus and had a super helpful chat this morning.

About Peru -
 Buying in Peru was actually not bad. Our search really became active in May/June shortly after the first shock of the pandemic, but it seemed like there were very few in any offers on the properties we pursued. 

  • Communication/Process - With my beginner/intermediate competency in Spanish, clear communication throughout the process was sometimes difficult. Also being an expatriate residing in Peru had some challenges in how quickly the bank would give final approval on the loan and required a lot of patience with my beginner Spanish. The bank approval process seemed slow, partially because of unforeseen challenges associated my wife and I being expatriate citizens solely residing in Peru. 
  • Contacts - I learned about the process with the help of several local contacts - my landlord/mentor/surf buddy that I was renting from when we first arrive in Peru provided encouragement and other connections such as a local lawyer we hired for a flat fee - this was piece of mind as we were ultimately going to sign contracts completely in Spanish! Finding the right people helped.
  • Funding - Interest rates with local banks are not as low as in the US, (5% is a really rate) and as we had only been in Peru 1 year at the time with no established credit in the country, the bank required a letter from my employer that we would deposit salary into the bank every month. I think without such a situation, I believe non-citizens have to pay cash or find private lending. 
  • Our plan with the unit is to hold and and rent to expats long term, then possibly return snowbird it to Lima during the northern hemisphere winter months as we are from NY.

Look forward hearing your thoughts and staying connected.

@Shaun Schaller

-What areas are you targeting and why?

Columbus, Ohio MSA (not the 43211, 43224, 43222, 43223, 43204 zip codes)...and select secondary markets within 30 miles of Columbus

-What systems and tools helped you to achieve success?

Airtable, a good CRM, UpWork, and a reliable handyman

-What pitfalls should we try to avoid?

Starting investing in SFR or small MF. Buy as many units as you can out of the gate.

-What recommendations do you have?

Talk to as many people doing what you want to do as possible...success leaves clues

Best of luck

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