Newbie from across the Pond.. looking to invest remotely

15 Replies

I know what your thinking,  why would anyone from  good old England, ever decide to invest in the US Real estate market?

Firstly, have you seen  what prices are like in London. They are insanely  expensive,  outside of london does present a few opportunities but  recent changes in regulations has created an extremely unfriendly environment for small investors.

 Secondly, I am Jamaican, with the aspiration on moving back to the Caribbean in the next 5-7 years from the United Kingdom. Its a move I want to make for  family and quality of life reasons. 

With that in  mind,  I am looking  to build relationships to enable me to become a  successful long distance real estate investor starting with the my first deal. After reading several post and   listening to a few podcast, I have settled on  investing in below market multi-family properties with the potential for good cash flow and equity growth. 

 Any suggestion or advice is definitely appreciated.

Lance,

Sounds like a good high level plan to me.  I would advise you to get some cash together and pick a market in the USA to attack.  You really just need one market, unless you have tens of millions you need to invest right away.  This will be a lot easier.  There's tons of data out there, but you'll likely be in the center of the country where real estate hasn't already exploded.

After picking a market, I'd get some contacts in that market.  Realtors and property managers for sure.  3 of each would be good.  Have the realtors send you listings, put you on their auto distribution.  Study these markets.  Understand from a far the demographics, neighborhoods, $ / square foot, etc.  Study the municipality's property website (this shows you all the sales, tax values).

Next, take a trip.  Go spend a few months in this market.  Let lined up with financing (if needed).  Look at properties with your chosen realtor(s).  Buy some deals to hold and pick a property manager.

Move to the Caribbean, fly to your market now and then to check on things and buy more.  

Good Luck!

Chris

Hey @Lance W. , welcome to BP! You're in great company: There are a horde of Brits looking for great long-term deals here in the States. Some of them are right here on BP!

I agree with @Chris Sellers that your next step is to begin narrowing down your market choices.

My best advice:

  1. Be ruthless with the numbers - Be crystal clear on your financial objectives and how you'll measure success. (For me, it's cash flow and cash-on-cash return, but your mileage may vary.) Don't compromise them for the sake of a deal.
  2. Build your local team carefully - I'm not a fan of turnkey investing, but if you choose that route, watch out for conflicts of interest. Your deal source can't also be your pre-acquisitions advisor and your property manager without you getting the fuzzy end of that particular lollipop.
  3. Build an independent local network - One of the biggest mistakes many overseas investors make is relying solely on their local hired team for feedback. Instead, use BP and other similar resources to build yourself a local network separate from those providers that you pay for services. Use these local investors as a sanity check to ensure you're receiving the full story from your paid advisors.

Thanks  @Chris Sellers  ! I appreciate the encouragement and advice.  I have actually been  looking at the center of the country, casting the net wide at the state level to get a idea of what is possible.  So far Ohio, Indiana and kentucky  seem like they may worth taking a closer look at ( a purely numeric observation).  Three states  is definately too wide an  area,  so i would be looking to narrow that down to a few small pockets with those three states. 

 Not knowing any about these places  i will mostly  like pick population size to  narrow down my search to pockets before starting to contact  realtors and wholesalers in operating in those pockets. I would expect to start contacting them in th next 1-2 weeks. If you know any  rockstar realtor or  wholesalers in those states feel free to  me refer them to me. :-)

Then i will see how we progress, i do agree with your one market suggestion. That one market/city/state will be determined  by our first deal, where we hopefully would have setup a good enough team to aquire more without the need to be there in person. The trip is definately on the cards, for the reasons you stated  meeting local lenders, agents, property managers  and possibly contractors in person when we are closer to a deal. My work situation would not allow more than a week or two.

 Thanks again,

Lance

Originally posted by @Mitch Messer :

Hey @Lance Wisdom, welcome to BP! You're in great company: There are a horde of Brits looking for great long-term deals here in the States. Some of them are right here on BP!

I agree with @Chris Sellers that your next step is to begin narrowing down your market choices.

My best advice:

  1. Be ruthless with the numbers - Be crystal clear on your financial objectives and how you'll measure success. (For me, it's cash flow and cash-on-cash return, but your mileage may vary.) Don't compromise them for the sake of a deal.
  2. Build your local team carefully - I'm not a fan of turnkey investing, but if you choose that route, watch out for conflicts of interest. Your deal source can't also be your pre-acquisitions advisor and your property manager without you getting the fuzzy end of that particular lollipop.
  3. Build an independent local network - One of the biggest mistakes many overseas investors make is relying solely on their local hired team for feedback. Instead, use BP and other similar resources to build yourself a local network separate from those providers that you pay for services. Use these local investors as a sanity check to ensure you're receiving the full story from your paid advisors.

 Thanks for the pro-tips @Mitch Messer

Welcome to BP @Lance W. !
Having moved from Germany to the US myself I understand the challenges and benefits of investing in US real estate. I think you already took a great step by being here. As others have said, the next step is zeroing into a market that you like or that fit your goals. Then connecting with people from that market and buy your first property. The first is always the toughest. Let me know if you want to chat sometime.

Originally posted by @Anderson Schulle :

Welcome to BP Lance Wisdom !
Having moved from Germany to the US myself I understand the challenges and benefits of investing in US real estate. I think you already took a great step by being here. As others have said, the next step is zeroing into a market that you like or that fit your goals. Then connecting with people from that market and buy your first property. The first is always the toughest. Let me know if you want to chat sometime.

 Thanks  for the input Anderson, I would love to pick your brain sometime.

Gonna go ahead and be the voice of reason....again.... step 1 in real estate investing, learn the r.e. cycle!

Value investing is dead in this segment of the cycle, so no such thing as below market multi family. That means anything on the mls is overpriced, and "wholesalers" that do manage to extract some "value" out of the marketplace aint gonna give it to you, cause they don't have to. Sellers also don't have to give up equity, even those that need a quick sale. The goal might therefore be a "fair" deal. Still hard to find.

I would warn you though, so many overpriced "deals" around here are sellers waiting on "california money"  (Out of market players who will accept ridiculously low returns, or no returns, or buy crap neighborhoods with no hope of appreciation).

This 10 year run in us real estate is a by product of artificially low interest rates, so we are not sure if it is real! don't forget, you can have negative returns in real estate.

Keep an eye on u.s. treasuries, as the benchmark 10 year is expected to continue to go up,and if the market is still intact after 4%, then you can feel pretty confident that this is sustainable. 

@Lance W. good advice here.   I'm an American, but live abroad and invest in my home country.  I work with family and other expatriates.  Partnerships, good agents and property managers are critical when purchasing across borders. 

I would love to see some of the numbers you are finding on properties in Ohio Indiana and Kentucky. I had researched on SFH but in the end, it was multi-family that won. I have two triplexes currently both at 10%+ caprate and 12%-16% cash on cash ROI, with 20-25% down @ 5.75% loan rate. Strong numbers for the Colorado market, though my research tells me Texas and Florida are even better. You might want to check out these markets..not to mention, Florida is getting pretty close to Jamaica. ;)

Originally posted by @Lance W. :

I know what your thinking,  why would anyone from  good old England, ever decide to invest in the US Real estate market?

Firstly, have you seen  what prices are like in London. They are insanely  expensive,  outside of london does present a few opportunities but  recent changes in regulations has created an extremely unfriendly environment for small investors.

 Secondly, I am Jamaican, with the aspiration on moving back to the Caribbean in the next 5-7 years from the United Kingdom. Its a move I want to make for  family and quality of life reasons. 

With that in  mind,  I am looking  to build relationships to enable me to become a  successful long distance real estate investor starting with the my first deal. After reading several post and   listening to a few podcast, I have settled on  investing in below market multi-family properties with the potential for good cash flow and equity growth. 

 Any suggestion or advice is definitely appreciated.

 Welcome to the site Lance.

Thanks @Troy Williams Solid numbers on your triplexes, How did you find them? Mls, agent, off market... did these need major rehabs or were they more light updates? I did a very basic highly level look at Texas and Florida, and while they did turn up properties. There very fewer matching up to some parameters I'd like to work within. So I chose my wider areas above based on that, I've since narrowed those down to a few specific pockets with those wider areas. My next task is to find rockstars buying agents local to those pockets.

Lance - Welcome to the fun. I can't speak for other areas, but I'm a buy and hold investor in Northeast Ohio. This area is tricky as there are several spots where the demand is high, but the pricing is just too inflated when compared to other areas. And as another response mentioned, sellers are trying to take advantage of the out of town buyers every day. Even on BiggerPockets I see a few investors regularly talking about their properties as though they are in the hottest areas of town when in fact they are sub-par locations. Unless you're really doing your homework it could be easy to fall prey to these sellers.

My target is 20-30% cash on cash return and I'm only looking in areas that I'd be comfortable renting to my own kids. Taking these few criteria along with a few others, my next purchase will most likely be a small apartment or mixed-use building.

If you're looking for some local input on the Cleveland area or some referrals to local pros, I'd be happy to be of assistance. Or if you get to the point where you're ready to invest and would consider partnering up, just shoot me a message.

  @David Bardwell Thanks.  Its been really interesting experience so far and  I am eagerly awaiting  @David Greene book, "Long-Distance Real Estate Investing"  any day now in the post. It should  hopefully give me a few pointers on strategies to combat predatory pricing tactics aimed at long distance investors.

@Will G. assessment was spot on,  and I liked his  it way more than I let  in on. It was open and  honest.  

I like your idea of only purchasing  in areas where you would be comfortable renting to your own kids. Its prudent, areas can obviously change overtime but you can only act on the information  available.

Originally posted by @Lance W. :

@James Wise thanks. checkout your site, you have been a busy  man.  Are  you only  covering Cleveland.

 Yes Cleveland is the only market I handle. Keeps me pretty darn busy, lol.