All Forum Posts by: Lee Ripma

Well I don't have something nearly as poetic as the excellent post by @Jason E. Smith

but a few thoughts: 

Property location above all else 

Cash flow is a hedge, equity is what I'm after 

Equity is what allows you to build wealth and endlessly 1031 exchange 

Understand how to get commercial loans and influence the appraisal process 

I sometimes say that I would have bought more, but I am glad I took small steps so that could learn lessons and find my niche. Now I know my ideal property, when I see it, I jump on it. 

Time is way more valuable than money 

Don't be cheap about saving money, you'll waste a lot of time 

Treat others well, all businesses are relationships businesses and people make or break, even in a digital age 

....and lots of other things that are hard to really explain until you've been through them! 

@Alexander Palomares this is exactly what I did/do, feel free to have a listen to my BP podcast where I discuss it. You are a bit more likely to buy on the MO side, that is where most of my investments are. However, I do have some on the KS side. The taxes are a little higher in KS but not a huge difference. I would say consider deals on either side. Property is certainly pretty hot right now so be prepared to jump on deals that come up. 

You forget the most important part, where you fall in love with CSS and buy buildings just to do them! 

@Christian Deaton

David Robinson is spot on! You need to know how to cost yourself without a GC. 

I’d use deals on LoopNet for this. It’ll expose you to how you get something a little (or a lot) different from everyone! 

@Amy Hatcher consider local partners and consider PM companies. Rehab takes oversight. 

@Jennifer Roberts

I am an out of state investor (and local investor) and I put properties under contract without visiting them. First I vet the location, then I put under contract, then I hire professionals to inspect them, then I read the reports of the professionals I hired. So yes, you can 100% do it. 

@Zhuang Liang

What are you looking for? I focus on B-class zip codes and then vet every property. 

@Joshua Espejo 

Sounds like you did a lot of due diligence and it works for you. Everyone has different criteria for what they are looking for. I look at the DISCERN criteria for each location. I have included what I am personally looking for to be helpful. Remember, everyone has different criteria. No right or wrong, lots of ways to make money in RE! 

D - Demographics: variety will work although there a few I avoid with market-rate tenant strategy but will include with Section 8 tenant strategy 

I - Income: for market-rate tenant strategy I'm looking at median household income at the location to be 28k/year or greater regardless of the unit size. Think about target rents on your property in relation to this income. 3x is the usual rule. So if you want 750/mo then 3x would be 27k/year. If you want 1200 then you're proably want to go higher 1200x12x3=43.2k. 

S - Schools: depends on the unit size. For smaller units I am not looking at the schools, for larger units I am looking at schools. Middle of the road or higher, so 4+ score in general when I'm doing larger units. If tenants won't have kids (smaller units) it does not matter what the school ratings are, they won't care. 

C - Crime: I will take a variety of crime scores. If I'm at 3.5x I do a few extra things like cage AC units. Most of my units are usually 2-3.5x the national crime scores. 

E - Expansion: Stable or growing population. No declining populations ever, period. Increasing median income as well. 

R - Rent: Make sure whatever this median value is jives with your underwriting on the deals. I usually target above 750/mo regardless of unit size. 

N - Neighborhood: Something to take a look at, love it when a starbucks is the nearest store but a variety of nearby stores will work. Always take a look at nearby businesses to a property. These business are local so you'll need to do a little manual work here. 

What is stopping you from pulling the trigger? Do you not know what you're looking for? As the saying goes, if you don't know what you want, then anything will work! 

@Ronda Reid-Mohammed

1. Look at your current goals and resouces

2. Pick a market that matches those goals and resouces 

3. Pick an asset class, if rentals are you doing SFH, 2-4 units, or 5+ units, or something else like MHP. Whatever asset you pick make sure your market has that

4. Contact a local agent who can set you up on an MLS feed. You can also do the first pass for deals on Redfin.

5. Analyze at least a few deals a day, get comfortable looking at deals and knowing what you're looking for 

6. Close on the deal, operate it, do it again and again. 

This is not exactly what I did to start out of state investing, but in hindsight, this is the only thing I should have been doing. Now this is exactly what I do! Get going on OOS investing!