I am looking for advise for long distance investing, especially for a newbie investor.
Me too! I'm in Canada and want to invest in rental properties in the Philippines.
I am 5 hrs drive from my rentals. Before I stated to travel cross country for my job I managed them with the help of my real estate agent. It worked well until we both got too busy and a tenant cost me $15,000. I recommend for long distance you get a REALLY good property management company and then WATCH your monthly statements like a hawk! I have built a good relationship with my Prop Manager and they know if I tell them they made a mistake that I am usually right.
Dave Ramsay recommends not purchasing investment property that is over an hour away. This is good advice for anyone, especially a newbie. Learn the business before you complicate your life and incur costs you may not be able to control. If you are close you can drive by to watch over the property, you can stop and get to know the neighbors and hear any complaint or praise, ** and you can check up on any work that was done or that CLAIMED to be done**.
Hi @Gabriel Isedeh , always glad to see more people join the real estate market! In terms of OOS investing, like many have already mentioned, it'd be really important to find a good, trustworthy PM. Make sure you really get to know the individual / team who you'll be working with! Read reviews, ask around etc. And even intuition & first impression are sometimes quite good indicators as well - there's nothing worse than working with a PM who isn't responsive or transparent about things. Hope this helps, or let me know if you have other questions!
Finding a good property manager is really difficult. It's more difficult than finding a good deal for a rental property. I have a few out of state rentals, but my current property manager is retiring and I need to look for a new one soon. I feel like finding a good PM is like a trial and error. I've had a few failures in the beginning, but it's important to continue on your real estate endeavors.
@Gabriel Isedeh Excellent insights from all the above BPers. @Kim Holley I like Dave Ramsey's advice. The first property i purchased was right in my own backyard - it's now a rental and the other properties are about an hour away. Whether the property is an hour or five hours away, having a reliable team (property management, etc.) is key to long-distance investing.
@Gabriel Isedeh - Welcome to the game and the site! I too am looking at OOS investing and have found that one of the most important things to have in place once you decide your market is a GREAT Team. Have you read @David Greene book Long Distance Real Estate Investing - it is just short of a step by step guide on how to do it. I found that the hardest part for me was deciding on the Market however the Market Analysis Tool on BP Insights was pretty Epic in at least providing some Guidance. PM me and we can chat some more - welcome again!
@Gabriel Isedeh another vote to read the book on Long Distance Real Estate investing by David Green. Investing OOS requires a high level of education and skill. Be very careful. It can be done but the risks increase when you do it remotely, especially if you are trying to oversee any major rehab remotely. Ideally, find a boots on the ground partner that you can invest with.
Building a solid team of professionals is definitely key. I would talk and interview many PMs, realtors, etc.
Thanks for the referral to the book by Greene. I will be getting that one asap !
@Gabriel Isedeh simple, connect with those that have done 100s and 100s and 100s of deals PM in place. 10- 14% net caps. All you do is close. Nothing for you to do . But make sure you have cash on hand, not have to borrow . Keep is simple ,so many research and research and never do anything .
If you reach out to local realtors (find the highly recommended ones in the area via a web search), they can be a great resource for finding good property managers in the area, including a flavor of what you'll find in the area, names to reach out to, and probably names to stay away from, too. Also reach out to the local REIA. They have great information, as well, since they're already investing in the area and familiar with who's there and who does what, and does it well.
Hi Gabriel, I'm an agent in Colorado as well as Arizona. Because of the lack of good cash flowing deals in Colorado we opened a brokerage and property management firm in Phoenix which I manage. We cater to out of state investors and have clients all over the country purchasing properties in our markets. We find and analyze deals for you, as well as provide property management services and vendor/project management. This makes it really easy for out of state investors to invest in Colorado and Phoenix. We'll be opening new markets as additional opportunities present themselves. It will be tough (not impossible) to build a solid team consisting of an experienced investor-agent, property manager, and various vendor contacts for renovation and repairs. Just read David Greene's book Long Distance Real Estate Investing :) Message me if you'd like to speak further. Thanks -Mike
Be very careful. Be wary of anyone offering advise who has something to sell, real estate agents, pm's contractors etc. Keep a very close eye on every aspect of the deal. Stay in close communication with everyone. There is nothing "passive" about this type of investment. I inherited an OOS rental when my Dad passed, and it ate me up with fees and maintenance. It soured me on residential REI for a very long time and as a consequence it cost me a lot of money in lost opportunity.
For flipping, similar concepts apply--you can do it as risky or least-risky as you want. The key is to know what strategies constitute what on the risk and effort scale.
I found that Neal Bawa's free course helped me narrow down my preferred market based on publicly available facts and figures. As with any free course, please be careful of the upsell. Furthermore, you have to choose what factors feel most relevant based on the recent changes with Covid. Obviously you can create success in any market if you have the right team and insight, but I found this to be an important first step. Good luck!
Your best bet is to start with David Greene's book "Investing in Long Distance Real Estate". It is a great starting platform that explains everything. I have been following the advice from the book and have purchased 6 units out of state without even seeing any of these properties in person. The book's value is worth way more than the $20 it costs.
Simple, connect with somebody actually doing deals versus reading books and going to seminars. Learn from them. Apply what you learn and then do it. Keep it simple. Stay away from books and tapes. Every single day I’m contacted by people that tell me they want to buy properties and all they do is research things to death and never do a deal.
just analysis paralysis. Research research research and never ever do a deal completely wasting my time alongwith others. Good luck to you all the best.
HI Gabriel, I am also a Newbie and my rentals are 4 hours away. when I first started, it was very hard, many times I asked what did I get myself into. While it will be very good to hire a PM, it is not easy to find one. I fired two PMs already, one of them after one month, he wanted to charge me 200 dollars for 3 keys. I currently have rentals in 2 different towns in PA, 2 that i am self managing and one managed by a PM which I am planning to take over soon, the one that is currently managed by the PM, I barely see any income from it, every month i have to call them to go over the owner statement. My first advice to you, will be to create a team, if you want to self managed, try to get a good handyman. While things have been hard managing two of my rentals, i have no regrets because i have learned so much from self managing and still learning, reach out to Bigger-pockets community when you have questions, believe me, they helped me a lot
Welcome! Be sure to assemble a team of professionals wherever you search. It is crucial for success in long distance investing.
Gabriel, great place to learn how to get started with OOS long distance investing. Like biggest challenge in long distance investing is getting your trusted team together. It is important to invest in relationships.
Quick tip Gabriel, look for markets that you might have family or friends in close to where you want to invest. Can also ask for referrals from family and friends maybe they may know people in that market that can oversee your team. Generating wealth is also creating jobs for people. Goodluck. Feel free to hit me.
@Gabriel Isedeh if you invest out of your area, be sure to screen any PMC you got BETTER than you would a tenant!
Too many newbies focus on the cheapest PMC and get burned and leave real estate.
Also, micro manage the PMC a BIT for the first few months so you learn about tenants and managing. This will help you understand the business so you don't get taken advantage of.