Is there anyone who is doing long distance investing? investing out of there country or state? Cause I want to know what measures do I have to take before investing in another country or state.
@Jasraj Singh I self manage 26 doors all of which are nowhere near where I “live” I’m not even sure where I live lol. Nothing to it. I also have a day job.
Brother Felipe, your 5 points are very important for new investors like myself. If you don't mind can you please share with us why did you specifically choose Texas? I see most of the foreign nationals choose TX, Florida, Atlanta, GA for their residential /multifamily properties. What type of investments did you choose in Texas and what were the numbers?
I am sure we all can benefit from your experiences and at some stage we can collaborate together.
Hi Mohammad,
I bought my first property in Texas at a tax auction (through an LLC). I chose Texas for some reasons like the State economy, migration, number of counties, real estate market appreciation, and affordability.
Florida, for example, is a market very desired by Brazilians, but the values are way higher than Texas.
Georgia is a good State to invest but, in my case, the tax auction rules there are not so investor-friendly like Texas (I have been to some auctions in Dekalb County).
I bought an SFH, rehabbed and put on the market to sell a few weeks before the COVID19 hit and the government determine shelter in place (not very lucky, right!?). So I believe it´s going to take a couple of months to sell.
I made some deals in partnership with other investors in Georgia and Tennessee (off-market) and then decided to focus in Texas. I spend a few weeks visiting these States, talk to people in the market before making my decision.
Once I decided to focus and invest in Texas I searched a lot and talked to people here in BP. If you what to talk to someone there to understand better the market I can recommend you @Bruce Lynn that is really knowledgeable and a very nice and helpful guy.
If you want to understand better the rules and tax auction in Texas talk to @Arnie Abramson (from Texas Tax Sales Resource Group). I am a priority member with then and it is very helpful for an out of state/country investor (I can give you more information on that if you want to).
If that is any other information I can give to you just let me know.
I am from Brazil and investing in the US (Texas). I recommend you follow some steps:
1) research where and in what type of property you want to invest;
2) run the numbers on a few properties that match your criteria;
3) talk to people (other investors, realtors, contractors) in that area to understand better the market;
4) fly there at least one time to drive, visit properties, etc;
5) Invest.
Even with all precautions, you can still have problems with rehab/tenants, etc. But this is part of investing in real estate.
It is possible and profitable to invest in another state/country.
Do your homework and go for it! Let me know if I can help in any way.
How much is too much detail when defining investment property criteria?
Thanks!
Hey Ryan,
I Believe its all about balance. If you have way too much details you want in a property you may not find one to invest. If you have just general criteria (e.g. I want to invest in SFH) it´s going to be hard to define an area/city/neighboorhood to invest and to find the comps.
If you have a priority criteria for you (e.g. I want to invest in rentals that meet the 1% rule) you can start by that (excluding all areas that wont meet this one) and go on with your second, third, etc criteria.
This is an idea (that is other methods and you should find/creat yours).
I am a real estate broker in Arizona but I invest in 5 other states. We currently own 24 properties across those 5 states. I also manage all of them from Arizona. It is all about your team that you put in place (boots on the ground). I learned alot in 3 years and have it very dialed in now. Nothing is perfect, the reward of higher cash flow in these markets is worth it in my opinion.
brilliant! but can you tell me how do you find out that a particular market or a place has a higher or lower cash fl
I am not one to live and die by the 1% rule as it does not work in many markets, however we were able to identify many markets that are not even considered "hot markets" to investors that had strong rental demand and we could buy properties moderately distressed, so a little rehab and rent in days for more than 1% of property value. We also then look at property taxes and job market. Many cities in the midwest have demand for nice rentals as they are not considered "sexy" by investors and they are very affordable to purchase.
I live in Canada but started investing in Mexico a few years back. I now look at the whole world as my playground but I'm focusing on the best markets, which are in Latin America and Southern Europe: Mexico, Costa Rica, Panama, Dominican Republic, Colombia, Brazil, Uruguay, Portugal, Spain, Italy, ...
That approach is best for diversification. Most investors are taking huge risks without realizing it by having all their assets in the same city, state or country and in the same currency. Moreover, at any time, there is always at least one market that works and you can switch your focus depending on how each market is performing at any given time.
Of course, if you want to do something like this, you need to acquire the knowledge and have the necessary connections on the ground. It takes time and ain't easy. Alternatively, you can invest along with investors who have what it takes and know what they're doing.
Mike, if you decide to invest in Brazil or have any questions about our market let me know. If I can, I will help you or if I cant, I will introduce you to someone more knowledgeable.
Thank you for the offer Felipe. I already have my contacts on the ground but I will contact you when I’ll be able to travel again. I need to visit again to see for myself and update my knowledge.
Great advice and kudos to you for investing successfully from so far away. I'm an investor from Canada and looking to get in the American market next. How have you secured financing the states? I'm finding this to be my big hurdle at the moment. While I have amzing credit in Canada, I am a big zero in the US because I don't have an American social insurance # and no credit history. How have you overcome this? Any advice or insight would be greatly appreciated.
@Jasraj Singh SIMPLE surround yourself with a team that is actually doing it daily... 10- 14% net caps ( more after you refi COC ) are to be had 100% hand off !! BTW, Do not over analyze like 99% do . Get the numbers and do it !! So many say I am going to sit on the sidelines and wait . Well the only ones that make money on the sidelines are coaches :)
If you want to invest overseas, you first need to have goals and strategies to lead you to your goals, as you would if you'd invest at home in India or any state of the US.
You asked how you find out in which countries to invest. This will first depend on your objectives and strategies. Then, you have to select places that are investor friendly, that have a legal system you can rely on, that allows you to own properties freehold (if that's what you want) and that will give you a satisfactory return. You need to take into account the economics and the politics of the place as well.
Yes it's not easy and it takes time and this is why not many people are knowledgeable about it. However, that's normal when you think about it. If it was easy, everybody would be doing it and the opportunity to make great returns might not exist or it might be much less profitable.
I'm doing two BRRRR deals in kansas Topeka. Great cash flow market but you need to have the very best team and the only way to assemble a team for a newbie is to read David Greene book. Also ask question on the forums here, read old forum posts. Do a ton of research in the market you are pursuing and narrow down a niche property you want to invest in. For example I look for large 2bed 1bath homes through a wholesaler or a savy investor minded real estate agent. These two sources become a deal system where they are sending you deals. I have my core four send me deals. I am upfront about a bonus I will pay out for a slam dunk deal. 500 dollar signing bonus for closing on a great BRRRR deal. You will be surprised that your core four will start working even harder when they know there's a bonus involved. All there best contacts and connections start becoming yours because they know if you succeed that means more business for each any every member of the core 4. Agent, PM, lender, contractor.
I recommend looking at maps of the target sub market and go INVESTIGATE like you work for the CIA. Write all the data you find, from neighbors, to schools, to rents for different type of houses. Find out what tenants are attracted to when it Comes to renting. Your property manager if he’s a good experienced one will give you a ton of info and paint a picture of life as a tenant in that market your pursuing. Trust but always verify any info you get from your core 4. I verify within the core 4 and I also call additional sources when in doubt.
Pre screen every member of your core 4.
Call 10 agents and pick one
Call 10 lenders and pick one or two
Call 10 property managers and pick one
Call 10 contractors and pick one.
You will get experience talking to people and formulating a even clearer vision of that market. You might even know that market more than where you live If you do This.
Good luck connect with me if you want mire Info on the Topeka market
Many of my clients are out of state investors. They research the Cleveland market, leverage my insight as a local resident and investor friendly agent, obtain third party home inspections to verify condition of the property, and choose a reputable property manager to handle things post acquisition.
I just have seen a bunch of people get burned with a little JV agreement with a split profit scheme with a mom and pop contractor (under $25M of work per year).
A lot of these pickup truck contractors are one week away from dipping into savings and screwing their remote partner over. Be careful... its not a matter if but when.
@Jasraj Singh I live in Hawaii and invest in Cleveland. We chose Cleveland because there are good deals and a strong rental market. Having a good team on the ground is critical.
excellent! but could you tell me how did you find out that Cleveland is a strong rental market? like by visiting there or talking to agents?
Yes, I visited before I did anything. Some don't like Cleveland for this reason or that, but at the end of the day, there are lots of renters there. Yes, we spoke with agents and property managers. All the best!
Alright! thanks man so you suggest me to visit and then think about investing there cause I'm confused how can I choose a market to invest in here?
Yeah, it's tough choosing a market. We took the ready, fire, aim approach. haha. We know we wanted to be in the Midwest market, so jumped into the deep end. Not recommended, but we felt we needed to go for it and then learn as we go. They say you pay for your education either in a classroom or on the street. We definitely got knocked around. Everyone's risk profile is different, but at the end of the day you have to decide, or you will be on the sidelines forever.
@Michael Ohara have you had any success finding a good agent(s) in Cleveland? Having trouble finding consistency.
Hey Michael, I don't really use agents. I get my deals off-market. I did speak with agents early on when I was researching. I'm sure there are plenty of good investor-friendly agents here on BP. All the best.
For the love of God, call every property manager in the city and talk to them in depth. Dont be afraid to sound dumb and be annoying. Ask them how they maintain properties, what do they do if rent is late, what if a tenant needs eviction?
Im new to investing, began investing out of state in the U.S. Had an amazing realtor, went with her agencies property manager and she was hot trash. It was a nightmare to me and now were slowly ironing out the kinks.
In my opinion, expect hiccups and expect to make adjustments. Its tough to manage from a distance in all honesty, I opted for a property manager but sometimes even they need to be managed.
We just started. Currently in Delaware and just about to close on our first investment in Valdosta, GA. Hoping to jump into that market a bit more. Have you started?
Great advice and kudos to you for investing successfully from so far away. I'm an investor from Canada and looking to get in the American market next. How have you secured financing the states? I'm finding this to be my big hurdle at the moment. While I have amzing credit in Canada, I am a big zero in the US because I don't have an American social insurance # and no credit history. How have you overcome this? Any advice or insight would be greatly appreciated.
Cheers
Hey Jeff, thanks.
I have never financed property in the US (yet). My LLC (G4F Investments) basically helps Brazilian investors to buy real estate there. So we are using private money so far. I spent the past 2 and a half years building my credit score (Do you have a credit card in the US?). I also have my ITIN. Last time I was in Texas I talk to a bank manager and she told me I could get pretty good fees if I wanted to finance real estate or car (based on my FICO score). But I will know better when I try to get a loan.
I pretend to start looking for financing options once I have a better idea (and info) about how the lending market is going. There is still uncertainty and I don't need that for now.
My idea is to buy a property using a bank (or other financing option) in the 3rd or 4th quarter this year.
Sorry for not being able to give your better info.
@Ben Pielstick Cleveland is a solid middle market city: less susceptible to the price fluctuations of major cities like LA, Denver, and Miami but strong enough economically to support all types of investing strategies for folks seeking cash flow and/or forced appreciation at incredibly reasonable prices. Home to Fortune 500 companies like Sherwin-Williams and Progressive Insurance, strong arts & culture scene, 3 major sports teams, all of which create a healthy demand from renters and owner occupants alike that investors can benefit from.
I live in CA and acquired two properties in different markets (PA and Detroit) last year. I echo what a lot of investors here are advising. I think the most important thing I've learned is to have the right team. I've already switched property management in one of my rentals and it's made a world of difference. Having a property manager who not only does their job well, but also is well connected with contractors, inspectors, etc. is important. This makes the world of a difference if you're not going to be hands on.
Do some deep diving in markets that you are interested in and visit at least once. When I visited my property in MI, I was shocked the world of difference one street makes. Certifications that the city or state requires are worth researching to avoid headaches. I know numbers are important, but they only tell you so much when you're out of the state/country when you're looking for deals. Know your tenant base and the demographics as well.
I would also advise finding a partner to invest with to minimize the risk when looking long distance. Best wishes on your journey.