Resources for finding out-of-state contacts
Real Estate Investor · Los Angeles, CA · Member since 2014 · 237 posts · 67 votes
Resources for finding out-of-state contacts
Most Popular Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ voteshas anyone been intentionally screwed by buying out of state.. does a bear sh in the woods heck yes... its all to common.. Investing out of state is super risky for those that do not know what they are doing and or have limited capital..
The thing is people in CA and in other countries think what the heck its cheap lets give it a go only to find out its very difficult and extremely risky. those that are telling you here on BP that it is not have another agenda they sell out of state properties and only talk it up ..
I wrote an E book for Aussies on how to invest in the US as they were getting hosed left and right by US marketing companies and less than honorable TK operators.. It is appropriate for CA investors as well.
I personally foreclosed on more than 200 LA based investors that had no clue as to what they were doing got talked into buying out of state by LA based marketing companies that neither owned the asset or were licensed to sell the asset.. IT was a night mare I would never do it again..
I have just finished trying to help one LA investor that bought 3 homes in Memphis a few years back.. One is boarded up has not been rented in 2 years. the other they tried to sell on contract but the buyer put a tenant in is collecting rent and not paying on the contract and the other one the tenant just left and its 5k to rehab yet again and they are with the best management company in the market..
so if your bound and determined to go out of state
1. find a market you like and make contacts with the locals there
2. do not buy through LA based marketing companies what do they bring to the table they have never even seen the house your going to buy they are only loyal and talk up those that pay them.
3. use the same common sense if you were buying a home in LA find a reputable agent get MLS listing do not trust ARV values from promoters those are blue sky.
4. get an independent home inspection just like if your were buying a home to live in.. do this before you close and make sure you know what your getting and ask for items that are problems to be fixed prior to closing.
5. buy at the top of the market not the cheapest those will have problem tenants and its very likely you could lose all your money on super low end.
Lastly if you are dealing with out of state TK go direct no need to pay outside selling agents its just tacked on to what your paying for the house. houses out of state are just not sold like they are on the West coast think about it why are these companies trying to sell homes 2k miles away from them... Because they know CA buyers will over pay and they could never get the same locally the locals just won't pay that amount the locals will buy the trashed houses rehab them themselves and rent them..
Caveat Emptor
35 Replies
I live in SoCal as well and have only bought out-of-state. I've never been screwed just because of the distance (screwed in other ways, but distance was irrelevant). I'm sure there are horror stories out there, but it all comes down to doing due diligence. I've also never hit a problem so far that I couldn't handle over the phone.
As far as finding the teams, you'd first want to pick a market to focus on so you know where to start looking. Then a lot of it can be done even here on BP by just asking other investors who they use. Referrals are really the best way to do it, just because if another investor recommends someone, they at least have a positive track record for someone so they are more likely to be able to help you as well.
- Real Estate Investor · Los Angeles, CA · Member since 2014 · 237 posts · 67 votes12y
Originally posted by @Ali Boone:
I live in SoCal as well and have only bought out-of-state. I've never been screwed just because of the distance (screwed in other ways, but distance was irrelevant). I'm sure there are horror stories out there, but it all comes down to doing due diligence. I've also never hit a problem so far that I couldn't handle over the phone.
As far as finding the teams, you'd first want to pick a market to focus on so you know where to start looking. Then a lot of it can be done even here on BP by just asking other investors who they use. Referrals are really the best way to do it, just because if another investor recommends someone, they at least have a positive track record for someone so they are more likely to be able to help you as well.
Sorry this might be a newb question, but how do I narrow down the markets? I have no idea, and right now I'm picturing the process as something akin to throwing a dart at a map.
- Investor · West Bloomfield, MI · Member since 2014 · 58 posts · 17 votes12y
@Jerry Poon timely post!
It is something that I believe is very difficult to find. Having trusted "boots on the ground" is something that is rare to find, but is possible.
Having spent some time in California myself, I can't imagine how people start investing out there.
I'm lucky to live in Michigan, because that is where I invest, and don't have to find boots on the ground.
With that being said, I'm interested to hear what everyone else has to say about this.
What would be the most important thing you are looking for?
- Real Estate Investor · Los Angeles, CA · Member since 2014 · 237 posts · 67 votes12y
Originally posted by @Dan Gheesling:
@Jerry Poon timely post!
It is something that I believe is very difficult to find. Having trusted "boots on the ground" is something that is rare to find, but is possible.
Having spent some time in California myself, I can't imagine how people start investing out there.
I'm lucky to live in Michigan, because that is where I invest, and don't have to find boots on the ground.
With that being said, I'm interested to hear what everyone else has to say about this.
What would be the most important thing you are looking for?
The most important thing at this point is someone knowledgeable and trustworthy.
- Investor · West Bloomfield, MI · Member since 2014 · 58 posts · 17 votes12y
@Jerry Poon - I'd imagine the best way to find that type of an operation on the ground is through referral or meeting the people in person, references, etc.
Doing a little research by googling "invest in Detroit" there really is no stand out site, it was interesting quick study as a Detroit/SE Michigan investor myself.
Not sure I helped you too much - but an interesting dialogue none the less.
- 12yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
has anyone been intentionally screwed by buying out of state.. does a bear sh in the woods heck yes... its all to common.. Investing out of state is super risky for those that do not know what they are doing and or have limited capital..
The thing is people in CA and in other countries think what the heck its cheap lets give it a go only to find out its very difficult and extremely risky. those that are telling you here on BP that it is not have another agenda they sell out of state properties and only talk it up ..
I wrote an E book for Aussies on how to invest in the US as they were getting hosed left and right by US marketing companies and less than honorable TK operators.. It is appropriate for CA investors as well.
I personally foreclosed on more than 200 LA based investors that had no clue as to what they were doing got talked into buying out of state by LA based marketing companies that neither owned the asset or were licensed to sell the asset.. IT was a night mare I would never do it again..
I have just finished trying to help one LA investor that bought 3 homes in Memphis a few years back.. One is boarded up has not been rented in 2 years. the other they tried to sell on contract but the buyer put a tenant in is collecting rent and not paying on the contract and the other one the tenant just left and its 5k to rehab yet again and they are with the best management company in the market..
so if your bound and determined to go out of state
1. find a market you like and make contacts with the locals there
2. do not buy through LA based marketing companies what do they bring to the table they have never even seen the house your going to buy they are only loyal and talk up those that pay them.
3. use the same common sense if you were buying a home in LA find a reputable agent get MLS listing do not trust ARV values from promoters those are blue sky.
4. get an independent home inspection just like if your were buying a home to live in.. do this before you close and make sure you know what your getting and ask for items that are problems to be fixed prior to closing.
5. buy at the top of the market not the cheapest those will have problem tenants and its very likely you could lose all your money on super low end.
Lastly if you are dealing with out of state TK go direct no need to pay outside selling agents its just tacked on to what your paying for the house. houses out of state are just not sold like they are on the West coast think about it why are these companies trying to sell homes 2k miles away from them... Because they know CA buyers will over pay and they could never get the same locally the locals just won't pay that amount the locals will buy the trashed houses rehab them themselves and rent them..
Caveat Emptor
- Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes12y
100% right on @Jay Hinrichs , doubly true in Memphis!!!
- Real Estate Investor · Los Angeles, CA · Member since 2014 · 237 posts · 67 votes12y
Originally posted by @Jay Hinrichs:
@Jerry Poon
has anyone been intentionally screwed by buying out of state.. does a bear sh in the woods heck yes... its all to common.. Investing out of state is super risky for those that do not know what they are doing and or have limited capital..
The thing is people in CA and in other countries think what the heck its cheap lets give it a go only to find out its very difficult and extremely risky. those that are telling you here on BP that it is not have another agenda they sell out of state properties and only talk it up ..
I wrote an E book for Aussies on how to invest in the US as they were getting hosed left and right by US marketing companies and less than honorable TK operators.. It is appropriate for CA investors as well.
I personally foreclosed on more than 200 LA based investors that had no clue as to what they were doing got talked into buying out of state by LA based marketing companies that neither owned the asset or were licensed to sell the asset.. IT was a night mare I would never do it again..
I have just finished trying to help one LA investor that bought 3 homes in Memphis a few years back.. One is boarded up has not been rented in 2 years. the other they tried to sell on contract but the buyer put a tenant in is collecting rent and not paying on the contract and the other one the tenant just left and its 5k to rehab yet again and they are with the best management company in the market..
so if your bound and determined to go out of state
1. find a market you like and make contacts with the locals there
2. do not buy through LA based marketing companies what do they bring to the table they have never even seen the house your going to buy they are only loyal and talk up those that pay them.
3. use the same common sense if you were buying a home in LA find a reputable agent get MLS listing do not trust ARV values from promoters those are blue sky.
4. get an independent home inspection just like if your were buying a home to live in.. do this before you close and make sure you know what your getting and ask for items that are problems to be fixed prior to closing.
5. buy at the top of the market not the cheapest those will have problem tenants and its very likely you could lose all your money on super low end.
Lastly if you are dealing with out of state TK go direct no need to pay outside selling agents its just tacked on to what your paying for the house. houses out of state are just not sold like they are on the West coast think about it why are these companies trying to sell homes 2k miles away from them... Because they know CA buyers will over pay and they could never get the same locally the locals just won't pay that amount the locals will buy the trashed houses rehab them themselves and rent them..
Caveat Emptor
That is mind opening. Thanks a lot!
Memphis sounds like a nightmare. Where have you had success when it comes to out of state rentals?
- Investor · Dallas, TX · Member since 2014 · 2k+ posts · 1k+ votes12y
Here's the thing... I could spend the next 1,000 words touting all the benefits of the Dallas/Ft Worth market, but I live here. I think it's great. There is no where else in the country I have any interest in investing it at this point in my life. I'm biased, admittedly so. However, if you want to know about the Dallas/Ft Worth markets, I love to discuss them. And, I'll be happy to share what I know, no obligations and no expectations.
You'll find a lot of folks here on BP who will do the exact same thing for their market.
There are unscrupulous people out there, in the woods, with the bears, and they are all shoveling a lot of sh*t!!! Check out the Real Estate Center at Texas A&M University.
There is a ton of great information & research there. Do some research on markets, prices in those markets, etc. Upgrade to the BP Pro account so you can search for members outside of your area. Find some members in the areas you're interested in and Follow them. Set keyword alerts for those markets and read the posts. It won't take you long to figure out who knows what about the different markets and who are the type of people who want to be associated with.
Good luck and let me know if there's anything I can do to help.
Hattie
- 12yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
its not Memphis specific its out of state investing in any of the so called cash flow market I don't care where it is these occurances happen all the time... the cheaper the homes the more the less than honorable folks come in buy them and flip them to the uninitiated..
there was a post yesterday about the 900 dollar house an investor bought in Detroit he was very proud of it... Well bad TK buys will buy those and resell them for 25 to 40k to folk that don't know any better.. The person who bought it if it works our great if not he is not out much and can walk away..
The person In Memphis I mentioned just happened to invest there. but as I stated it could be Atlanta it could be Philly it could be any city in these price ranges.. because that is what every one buys to hit the so called 1% or 2% rules.. and they are dominated by lifelong renters and all the issues that go along with it..
- Rental Property Investor · Weehawken, NJ · Member since 2014 · 1k+ posts · 704 votes12y
@Jay Hinrichs Great advice on due diligence.
One tip I have noticed in my own life. I tend to underestimate my existing lifelong network (non REI).
For instance, my best friend from elementary school lives in a decent SFR market, and I trust this guy with my life.
Bigger Pockets is a great place to network, but you are starting at 0 for every single person you meet. Many folks add to their credibility with writing, and by having a good attitude, but you still start at 0.
Friends that you already know and trust can introduce you to their markets. I am sure your college network has a couple people in the cities you hear mentioned throughout BP. Go to Facebook, search for a city, see who lives there. In the best case, you find someone who is willing to partner with you. In the worst case, you have someone to eat lunch with, when you visit the market.
- 12yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
good point when I stated building homes in SC... I had a long time family friend that I knew was rehabbing in HIlton head.. got a hold of him and 6 new constructions later he is running the show.. absolute trust quality work and profitable all at the same time. if not for him I would never have ventured from ORegon to SC to build new homes.
- Real Estate Investor · Los Angeles, CA · Member since 2014 · 237 posts · 67 votes12y
Originally posted by @Jay Hinrichs:
its not Memphis specific its out of state investing in any of the so called cash flow market I don't care where it is these occurances happen all the time... the cheaper the homes the more the less than honorable folks come in buy them and flip them to the uninitiated..
there was a post yesterday about the 900 dollar house an investor bought in Detroit he was very proud of it... Well bad TK buys will buy those and resell them for 25 to 40k to folk that don't know any better.. The person who bought it if it works our great if not he is not out much and can walk away..
The person In Memphis I mentioned just happened to invest there. but as I stated it could be Atlanta it could be Philly it could be any city in these price ranges.. because that is what every one buys to hit the so called 1% or 2% rules.. and they are dominated by lifelong renters and all the issues that go along with it..
Sorry what is a TK buy? And How do I do the @ thing without quoting you to keep down congestion in this thread?
- Memphis, TN · Member since 2013 · 969 posts · 524 votes12y
What tools and resources are available to me to network with out-of-state people in the real estate business? BP is a great tool to network with out of state people in the real estate business, I wish it was around when I started investing in real estate about 9-10 years ago. I would not have made some of the mistakes and I probably would have quit my job a lot sooner than when I did!! Other resources Facebook, Google search, Linkend, social media, ask for several referrals so you may call each of them and verify the person or company you are looking to hire (VERIFY THE REFFERALS as well), visit them and the market you choose, and or call several local real estate agents and ask questions they will be able to help a lot. Must pin point the area you want to invest in first. LOL!!
I am mainly looking for someone who would be able to find properties, walk them, appraise them, and ultimately manage them. It sounds like a lot, but I want to do this right and find someone good. Where do I begin? There are people good trust worthy people in every market but you will have to pretty much interview each person to make sure they meet the criteria you are looking for. Google search the person you interview, company they work for listen and verify everything they tell you. Criminal background check the whole nine yards...
As President Ronald Reagan said, "Trust but Verify"
- Atlanta, GA · Member since 2014 · 32 posts · 6 votes12y
@Jerry Poon A TK buyer is one with no interest in the property. They are simply providing the funds to a TK operator who buys and sells the house for the investor. To tag someone in the way I did you in this post, put the @ symbol then hit the spacebar once and enter their name. Below the reply box their name should appear.
- Real Estate Investor · Los Angeles, CA · Member since 2014 · 237 posts · 67 votes12y
@Account Closed
What were some of the mistakes that you made 9-10 years ago that would have been mitigated with BP?
- Memphis, TN · Member since 2013 · 969 posts · 524 votes12y
* Negotiating skills I learned over the period of time
* Writing up contracts for purchases and selling to and from investors
* Calculating ROI, COC, and how to find good wholesale deals by not just depending on the MLS in which I did through out my REI career
* Networking with people all over the world to learn new ways they do things as far as property management, tunrkey wholesaling, and tenant placement ideas.
* Creative Financing ideas- Blanket Loans, Owner Financing, etc..
These are just a few of them I can go on forever.
- Atlanta, GA · Member since 2014 · 32 posts · 6 votes12y
@Jerry Poon spot on. We work with a lot of them because we do the work for our clients on the front end with appraisals, restoration, and selling the home.
- Real Estate Investor · Minneapolis , MN · Member since 2014 · 169 posts · 33 votes12yIt's all depends on three thing getting right One narrowing on good markets, two finding great deals, and third finding good a property manager who is high on integrity. Not many many property manager meet this criteria.
- Real Estate Investor · Los Angeles, CA · Member since 2014 · 237 posts · 67 votes12y
What do you aside from the MLS? Also, I've been reading a couple books on real estate and you sound pretty well read yourself. Would you recommend your top books to read that would help a newbie like me?
- Memphis, TN · Member since 2013 · 969 posts · 524 votes12y
I use craigslist, bird dogs, wholesalers, driving for dollars, county court steps for bank foreclosures, and postcards to absentee owners. You can't just do one and expect things to happen, you have to do all of them above and also have the knowledge/negotiating skills to buy the property at the price you want.
Hint: Never be afraid to walk away from any deal... I have experienced unbelievable responses from motivated sellers just by walking away from the deals after my initial offers.. I often get a call back and they agree with my first offer, LOL!!!
These would be the top 3 books I would suggest reading below..
Rich Dad Poor Dad
The ABC's of Real Estate Investing
Think and Grow Rich
- South Lake Tahoe, CA · Member since 2014 · 111 posts · 37 votes12y
I too am interested in investing out of state. I have a condo and SFH's here in CA but agree it is expensive. Just some food for thought. You will probably need to think about what will be important to you. Are you interested in buying and holding. If so, for how long? The impression I am getting is that some people hold for 5-7 years then roll the property to take the gains to another market. I hold for long term.
Are you looking for completely rehab'ed houses or decent, maybe a little older, clean, houses in a little better neighborhood that will be an easier rental to hold?
Some things I would like to take into consideration: different market expectations from tenants, multiple industries for steady jobs, and costs vs rents, to determine where I should go.
- 12yChris ClothierBusiness MemberRental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
Are you looking for a long-term buy & hold strategy? 9 i.e. - hold the property for longer than 5 years) If so, the best bet is to pick markets based on the economic viability and possibility of stability (growth preferable) in the job market. Questions to look at:
- Two quick things to look at first:
1. Is the MSA growing?
2. What are the major industries driving the economic engine in that city and msa? (metro statistical area) here is a link to the most recent data from Census.govIn the opinion of many experienced investors (and by experienced I mean investors who have been around the block a few times and have had both success and failure) including myself, the market is what you look at first. Most prefer markets that are stable, not shrinking and the job market is supported by either very strong industries that are not in danger of disappearing in an economic crisis (most would have never put the auto industry in that category, but they do now!) or the economy is built on multiple industries. Second, they are looking for major employers that are stable and even the type that continue to attract other companies and population/job growth.
Believe it or not, that does eliminate a lot of markets across the country,but it also leaves a lot of markets that not be great long-term buy & hold markets. You may zero in on one or two at this point that you really like. So your next step is to look at finding quality companies/individuals to work with in those markets and we will call those partners. There has already been some good advice on here about finding a good partner. I will only add this - there are a lot of pretenders in the turnkey space. It is very easy to build a website and even easier to use buzzwords and marketing tools. You have received some really good advice on here from people who buy turnkey properties as well as companies that sell turnkey properties so be sure and follow that advice. Lastly on that topic, take nothing on faith from any company or individual. Verify and do thorough due diligence. You do not have to be in a hurry to buy and the more time you take the easier it will be to find a quality partner in these out of town cities. The ones pushing quick sales and wanting to get you into a property quickly are most likely the ones you can get hurt with the quickest.
As you interview and look for good companies to partner with, the best of the best will be willing and able to patiently answer your questions move at your pace.
NOW ------
When you have researched good cities and interviewed a quality partner to work with, you can begin to look at houses. NEVER look at houses first. As @Jay Hinrichs is pointing out, CHEAP pricing, especially compared to where you live is nothing more than a shiny object that gets investors in trouble.
You want to know that a market is fundamentally sound and that you are 100% comfortable with your partner because you want to stay married to them for the life of your investment in that city. Only then should you look at properties.
Last piece of advice in a long post - Do Not Be Afraid To Say NO! Do not purchase any property simply because you love a market or you love a particular partner. The investment property itself and the return you expect should both fit your needs and wants. Their simply is no reason to hurry. Take your time and when you are comfortable move forward - not before.
Great places to get data on markets and companies:
Google
Business Journal (enter the name the city followed by Business Journal in Google)
Bigger Pockets
Local Bloggers in that city
Census.govHere is a slide share presentation with a list on slides 24-28 of great questions to ask partners - especially Turn key companies - before you move forward.
You can basically find out anything you need to know from these sites and I'm sure other investors can add to that list.
Be sure to reach out if I can help you navigate the BP site or provide any more insight as you look to move forward. best of luck - Chris
- South Lake Tahoe, CA · Member since 2014 · 111 posts · 37 votes12y
Thanks for the census link and great information.
- 12yChris ClothierBusiness MemberRental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
Your welcome @Anna Shaver !
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