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 Hi Jasraj. Do you need to have a green card or citizenship before you start real estate rental investing? Do you know if someone on a work visa such as H1B can still buy properties out of state, rent it out and make income?
@Janani Kalpathi you don't need a green card or citizenship to start investing. Having a green card or citizenship only helps you build credit and fetch a good deal on lending terms. Whereas being on an H-1 visa you can buy property in any state where you get a deal.
@Janani Kalpathi I do wholesale and fix and flips in markets like Denver and Seattle as we have great appreciation and limited inventory. If I can get a great deal, I'll be profitable. These markets are priced so high that its nearly impossible to cashflow on a rental without putting at least 1/2 down.
I focus on the mid-west for rentals as they offer at least the 1% rule and they have solid rentals. I have rentals in Milwaukee (I have turnkey properties here) and NW Indiana (I have a 3 pack of properties for sale here), St Louis, MO and Montgomery, AL. I also have 6 rental properties in the Twin Cities, but I haven't been able to find a good enough deal to meet my requirements here for a couple years.
@Kim Anderson Hi Kim, I'm Janani and just starting out in long distance investing. 24 properties across 5 states in 3 years sounds like a remarkable achievement. Can you please share which states, cities and neighborhoods did you target and why?
BR,
Janani
@Jaziel Jane Beloya We are in Rockford, IL, Indianapolis, IN, Cincinnati OH, Cleveland, OH, Montgomery, AL. Technically we we are in 4 states and 5 markets as we sold a property we had in PA. A couple of these properties we inherited because he had bought the non-peforming note and foreclosed and decided it would make a good rental. We chose these markets because of the home affordability and the 1% rule generally works in these markets. We probably would not buy anymore in IL due to changing and increases property taxes, but we are happy with what we have there. We have found more rural area to also be underserved for rentals and if there is strong job market around we like that. No perfect science but that is how we start.
Hi Jasraj. I am based in Dubai at the moment and have an investment in Dallas and i'm currently exploring the market in Memphis. Depending on whether or not you need a loan, before wasting any of your time, if you do need a loan, secure a lender. Once that's out of the way, setup an LLC (you can do that online and there are several provider who can help). Third, being long distance, you have two options: either you go with a turnkey company or you can put build a "team" that will help you in that market. That "team" would consist of: real estate broker, property management company -- those are the two primary members -- then inspector, and, if you plan on doing fixes, you'll need a contractor. My experience tells me, if you choose a real estate broker who themselves are investors, chances are they are know an inspector and a couple of contractors. Your property manager is an extremely critical member of your team; do your homework. Then, after that, it's all about running the numbers.
Great feedback Rabih, are there any issues or certain procedures to overcome for non US residents? I have some non Us residents who are interested in partnering with me but am not sure how to go about it
@Jasraj Singh investing from Tel Aviv Israel for the past few years. Have a mix of small multi family and single family totaling 35 units. All in upstate NY. It’s an adventure and time zones make it a challenge.
@Jasraj Singh we represent clients from around the world. My recommendations would be to ask the agent how they accommodate showings of properties for you from a distance, ask for references, and talk with them in person.
We handle acquisitions, management, and rehab for our clients so the client really needs to trust us with their money (we also need to trust them also) When we talk with clients we reassure them that we never have access to their rents (electronic payments go to their accounts), or bank accounts. We pay for rehabs out of our pocket and get reimbursed from the client.
You don’t want a management company or contractor having your money in their pocket it is too hard to collect from another state or country.
I would recommend FaceTime communication in the beginning so that you can feel comfortable with the person. If you have any hesitation with the person move on.
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.
Great! thanks a lot! I know I want to start with multi-family rental properties and I've done some research about affordable cities to invest in which I've read articles about michigan, Indianapolis, Kansas and Texas and I'm a little confused about each but I just can't figure out what to look for in a market before investing there like how do you find out what's the rental income there or how much cash flow can i have monthly
I'm in Indy would love to connect with you....and see if I can add value to you
@Cheryl Vargas I would say our properties in the Alabama market give us the best cash flow. We are specificially in Montgomery and Prattville. There are other good markets in Alabama but we have not invested in those areas yet. The cash flow is specifically a result in the extremely low property taxes and affordable housing. Demand for rents has still be strong.
@Jasraj Singh I agree with the recommendations for the long distance investing book by David Greene. My wife and I purchased nine units in a city 9 hours away from us. We picked our market, then I decided to establish a strong network first. I picked up the phone and called brokers, wholesalers, agents, attorneys, contractors and, most importantly, property managers. After I shifted through them and formulated my team, we proceeded cautiously. It is a trial and error but, if your numbers work in that market, you can do well. I definitely recommend chasing the numbers and not being isolated to your local competitive market. It’s definitely doable!
Thanks a lot! really appreciate it! I’ll definitely look into that!
First going through inspections I look at the conditions of the big ticket items: roof, plumbing, heating and air, electrical, things like; and then the cosmetics. I try to determine if its a big fixer or a cosmetic fixer to be able to get it rented. This will also help you negotiate the price or offer. Consider the age of the house when looking for properties, this will tell you a lot.
As far as the numbers, I look to see if they make sense with the current rents that they bring in. Since I'm newer I like to over estimate my expenses (PM Fee, Taxes, Debt Service, Utilities, Capex, Repairs, etc.) and underestimate my income. Also consider the debt coverage ratio the cash flow provides. Each property will have different expenses depending on if your required to pay for some utilities or not. You will absolutely need reserves, don't skip this part when you're running your numbers. Check a few different sites and talk to property managers about the market rent potential and what you would need to do to get them there.
At first I just looked to see what the cash flow would be with properties, now I also look at the Cash on Cash return as well. Your parameters will vary based on what your goal is. Mine right now is just to build a portfolio and pay down the debt and get the tax benefits.
Thanks a lot man! Really appreciate it! Whats your rental property’s cap rate per year?
Absolutely agree! I read David Greene's Book and it totally supported ideas I had and given me the added knowledge and confidence I needed to make my first, long distance (2 hour drive away) investment! You can find it on Amazon. Originally posted by @Asim Sheikh:
@Jasraj Singh - I recommend the book on "Long Distance Investing" by David Greene.
@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.
that's great! what kind of properties do you own?
Lots of kinds. Short term long term single family small multi. 4 different markets. All self managed with a day job and a family. 26 doors
Excellent! but seriously how can you self manage 26 doors without a manager!
I work with a couple out of town investors in northwest Indiana... I can say if you aren’t going to be as hands on as possible stick to rentals, and a good property manager.
We have a small team, and we just successfully closed on a flip for an investor out of New York who never stepped foot in the property.
@Jasraj Singh I’m curious as to why they invested in Texas. I own a duplex in CA and a wow house in AZ. I would like to purchase another investment property and am curious as to why They invested in Texas? All information is appreciated. TIA
Thats great! But let me know whom are you talking about??
@Jasraj Singh Yes, I do this but I also have a lot of reliable people and family to ensure my investments go smoothly. Our flip closes in 10 days, total in 111,000 and selling for 202,500.
Thats great! But i don’t have any there so i think i have to go!
@Jasraj Singh Hi Jasraj. Do you need to have a green card or citizenship before you start real estate rental investing? Do you know if someone on a work visa such as H1B can still buy properties out of state, rent it out and make income?
Really! I didn’t know that but then how would the bank lend you if need and what if want to flip?