All Forum Posts by: Adam M.

I invested out of state (northern FL market) for my first deal and in my opinion it was a success. Similar to you, I just wanted to get started so I went with a light rehab that I bought right off the MLS. I made some mistakes along the way, including underestimating some of my costs, but I'm still cash flow positive and the property has appreciated quite a bit in the last year. Between down payment, closing costs and rehab I was in it for about $30k.

I would recommend looking for areas with low property taxes and reasonable insurance premiums (these have a considerable impact on cash flow), as well as states that are landlord friendly. In any situation, if the numbers work in the end - it really doesn’t matter where, given the neighborhood you are investing in is reasonably safe.

Once you’ve nailed down a location, you should make contact with a few PMs in the area - this is crucial for out of state investing. My property manager has been fantastic and it is absolutely worth the 10% fee to have so many things taken care of for you, including tenant placement. They will also provide immense value in their knowledge of the area, hopefully keeping you from buying in bad spots.

And then of course, decide on the realtor you want to use. You should be able to find one right here on BP, but again, interview a few. Then get to work and find a property, and start putting the offers out there if the numbers work. Don’t think too much.

Biggest risk? As long as you do your due diligence there shouldn’t be any major risks - especially if your first deal is a structurally sound home that just needs minor repairs.

Hope this helps to ease the stress, it is challenging but in a good way. Get that first deal done and your confidence will increase exponentially.

-Adam

@Erika Rogers

Rentometer is a good resource for checking rent comps on your own, but even better would be to ask property managers in your area to see what similar homes are renting for.

@Tiago Ferreira I decided upon Jacksonville because of the diversified industry, population growth, and rent-to-price ratios. There will also be more long term appreciation vs many other places that people consider for out of state investing.

As for advice, there are two things I can think of that are probably most important for out of state investing, based on my first experience:

- Find a good property management company. You’ll want property management for out of state investing anyways, but these people will also help to educate you on good neighborhoods vs bad neighborhoods, and they will also help you to vet out homes you are considering offering on.

- Research the area as much as possible. BiggerPockets will be your best source of information here, obviously. Jacksonville is huge so there are a lot of areas to become familiar with. I would even recommend spending a few days in the area if you can manage it.

Feel free to reach out if you’d like any further detail!

@Andrew Pokrzywinski thank you! I am certainly willing to connect in more detail.

@Garrett Askew fortunately my property manager had a handyman who took care of everything in just four days, and he did phenomenal work. I was going to drive down and do some of the work myself, but I’m glad I didn’t now. The cost was well worth the quick turnaround time and excellent quality.

Hi @Jonathan Tavarez,

Great question. I only considered Baltimore for a very short amount of time, I even lived in Canton downtown for a brief period of time. If I were to invest in Baltimore, it would have definitely been in the east side of the downtown area, and absolutely nowhere else, just because of the issue of crime. The problem is that in the eastern part of town it still would have tied up considerably more money vs. what can be bought in Jacksonville. As far as cash flow is concerned, I'll sacrifice a little bit of that if it means being able to acquire more units in the long run.

Hi @AliceSun Norman,

This particular property is in 32210, and it seems like this zip code has strong rent-to-price ratios overall. I have been told to avoid the "nursery rhyme" road names as these are the higher crime areas, but otherwise, there are some decent areas in this zip code for investors. And thanks, I will certainly reach out since there is still a lot to learn about Jacksonville, it's huge!

Thanks @Josh Taylor! I'm already thinking about the next investment I will make down there.

Investment Info:

Single-family residence buy & hold investment in Jacksonville.

Purchase price: $110,000
Cash invested: $30,000

I used a conventional loan with 25% down to purchase this SFH on Jacksonville's Westside. Rent-to-price ratios are strong in this neighborhood, so this deal exceeds the 1% rule easily as it currently rents for $1250/month. Updates to the house included paint, LVP flooring, and some other minor cosmetic fixes totaling $5k.

Principal, Interest, Insurance, and Taxes: $490
Monthly Rent: $1250
Vacancy/CapEx: $375 (30%)
Prop. Management: $150
Monthly Cash Flow: $235

What made you interested in investing in this type of deal?

I've had an appreciation for Florida and Florida-style homes for a while now, and with the growth in Jacksonville, I started to become very interested in this market for investing. Home prices are also considerably lower in this area vs. where I reside in Maryland, so I can scale faster investing in this area.

How did you find this deal and how did you negotiate it?

I found this deal on the MLS the day it was listed and put in offer in right away - at full price. Initially, the sellers rejected and accepted a higher offer. That deal fell through, and they asked if we would like to make another offer. Again, we offered at full price, and they accepted. We were also able to get some credit back at closing.

How did you finance this deal?

I financed this deal through a conventional loan at 25% down.

How did you add value to the deal?

This was a light rehab, only needing updated flooring and paint, along with a few other minor cosmetic fixes. Comparable homes in this area are selling for about $125-$130k, so after investing $5k into repairs, I would estimate I have forced around $15k in equity into this house.

What was the outcome?

We were able to land a tenant in about 2.5 weeks! This is a buy-and-hold investment for long-term rentals.

Lessons learned? Challenges?

It didn't matter that much in the end, but in hindsight, it's a good idea for out of state investors to hire on a property management group early on. They know the lay of the land very well, and can ensure that you are not offering on properties in bad areas.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Agent: The Brett Nissen Team
Property Management: Valiant Realty

I highly recommend the Brett Nissen Team and Valiant Realty.

Investment Info:

Single-family residence buy & hold investment in Jacksonville.

Purchase price: $110,000
Cash invested: $30,000

I used a conventional loan with 25% down to purchase this SFH on Jacksonville's Westside. Rent-to-price ratios are strong in this neighborhood, so this deal exceeds the 1% rule easily as it currently rents for $1250/month. Updates to the house included paint, LVP flooring, and some other minor cosmetic fixes totaling $5k. This was an estate sale that I found through the MLS.

Principal, Interest, Insurance, and Taxes: $490
Monthly Rent: $1250
Vacancy/CapEx: $375 (30%)
Prop. Management: $150
Monthly Cash Flow: $235

What made you interested in investing in this type of deal?

I've had an appreciation for Florida and Florida-style homes for a while now, and with the growth in Jacksonville, I started to become very interested in this market for investing. Home prices are also considerably lower in this area vs. where I reside in Maryland, so I can scale faster investing in this area.

How did you find this deal and how did you negotiate it?

I found this deal on the MLS the day it was listed and put in offer in right away - at full price. Initially, the sellers rejected and accepted a higher offer. That deal fell through, and they asked if we would like to make another offer. Again, we offered at full price, and they accepted. We were also able to get some credit back at closing.

How did you finance this deal?

I financed this deal through a conventional loan at 25% down.

How did you add value to the deal?

This was a light rehab, only needing updated flooring and paint, along with a few other minor cosmetic fixes. Comparable homes in this area are selling for about $125-$130k, so after investing $5k into repairs, I would estimate I have forced around $15k in equity into this house.

What was the outcome?

We were able to land a tenant in about 2.5 weeks! This is a buy-and-hold investment for long-term rentals.

Lessons learned? Challenges?

It didn't matter that much in the end, but in hindsight, it's a good idea for out of state investors to hire on a property management group early on. They know the lay of the land very well, and can ensure that you are not offering on properties in bad areas.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Agent: The Brett Nissen Team
Property Management: Valiant Realty

I highly recommend the Brett Nissen Team and Valiant Realty.