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6 Reasons Out of State Investors Fail
#4 All Forums Contributor
- Real Estate Broker
- Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH
In dealing with 1,000's of out of state investors over close to two decades, I've seen it all. I've seen the good, the bad, and the ugly. Most often, those who end up in the ugly situations do it to themselves though. It's a tough business but it's not as tough as some people make it on themselves. Below are the 6 most common reasons out of state investors fail.
1. Thinking you're the smartest person in the room.
You aren't. You're just some schmo in California who listened to some podcasts and watched a few YouTube videos. You haven't been in the trenches for years. You haven't dealt with 1,000's of properties, Tenants, Realtors, Contractors and more.
2. Being cheap.
In this business, the cheapest guy always pays the most. You try to cut corners and you'll end up getting an improper and / or incomplete job that the professionals you should have hired in the first place will charge you more now that you're desperate.
3. Hoping to get a better deal by telling your boots on the ground folks that you've got a bunch of referrals coming their way.
Whenever someone tells me this, they're getting charged a jerk-off tax on everything. Never say this. You sound like a complete jerk-off when you do.
4. Hoping to get a better deal by telling your boots on the ground folks that you're a big deal who's gonna buy 100's of properties.
Whenever someone tells me this, they're getting charged a jerk-off tax on everything. Never say this. You sound like a complete jerk-off when you do.
5. Being overly optimistic.
Bad things can, and do happen. Investors, especially those who want to buy the cheapest possible stuff (see #2) always think they'll buck the trend and only have good outcomes. It don't work that way homie.
6. Giving up too quickly.
It costs a decent amount of money to sell a property. Giving up after the 1st bad repair or unit turnover only guarantees your failure. It's real estate. If you buy a property at fair market value and hold it for at least 10 years, it's almost impossible to lose money.