Personal Podcast Notes (73) Investing out of state with Mehran Kamari
Show 073: Investing in Rental Properties When Your Local Area is Too Expensive With Mehran Kamari
My personal takeaways.
I buy out of state in Milwaukee. To scope out my little 1 mile radius area, I flew to Milwaukee and drove up and down the streets and checked off the areas that I didn’t like so I won’t by properties there. You can also prescreen neighborhoods virtually street by street with a drive through on Google Maps. However, remember that Google Street View is NOT updated every year, and a lot can change in two or three years.
First steps for out-of-state investors:
- 1. Select your potential market. Do you have a good rent to price ratio’s? Study that market a little bit. Macro economics. How’s the employment? Are the jobs growing?
- 2. How is the population growth? Is it steady? Is it growing?
- 3. Narrow it down to 2 to 3 markets. Try to network with people on BiggerPockets that live in those markets and learn a little more about them. You really need to have that first hand, boots on the ground knowledge before you invest in a particular market.
Then get your team lined up so that you can actually make a purchase. Who is going to do your insurance? Who Is going to help you as an agent?
And start looking for deals. Do your due diligence. And make an offer if you find one that you like.
I wouldn’t be investing at a distance without a partner/boots on the ground to do the in person vetting our team members.
Most of the people I work with my partner, my agent, my lawyer, my CPA, everyone, I’ve met on BiggerPockets. So I would suggest if you’re going to invest at a distance, try to connect with people on BiggerPockets.
When you receive a yellow letter (presumably from a wholesaler) you can call them up and ask to be put on their buyers list.
We are buying all 2% deals off the MLS that all meet the 50% rule, and we try to keep our repair budget somewhere around $5000.
My partner, my boots on the ground, goes up to look at potential properties and prepares the scope of work required to rent it out. She’s looking at the big ticket items that could kill the deal. So she’s looking at the roof, siding, HVAC, and electrical panel to estimate the total rehab cost. I’m collecting all the other information on property tax bills and estimating how much is gonna cost to insure the property. I’ll ask her what she thinks the market rent will be for that property. And if the numbers make sense on my spreadsheet that will make an offer on that property.
Having a good property manager is just as important as having a good deal. Make sure you take the time to thoroughly vetted them out. Spend just as much time as you’re going to spend vetting a deal, vetting your property manager, if not more. Because they’re going to be the one running this thing for you. And they can absolutely make or break the deal. If you have to get rid of one it probably makes sense to get rid of one earlier rather than later.
My partner / boots on the ground it’s the most important person on the team for investing out of state
Integrity is the number one thing to look for in a real estate partnership.
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