All Forum Posts by: Lee Ripma

@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! 

@Account Closed - I was in your exact shoes about 5 years ago. In San Diego, renting, owned no property. My roommate told me about BP. I now am a full-time real estate investor and I've been on the BP podcast. I invest out of state for my rentals and in-state for flipping and developing. I also do other investing including software and startups. 

Think about building a rental portfolio out of state in a growing affordable market. Affordable is key. You can do the house hacking thing in SD but if that is all you ever do are you really a real estate investor? I have never thought of anywhere I lived as an investment, it's a place to live. So I would focus your efforts on truly being an RE investor if that is what you want. 

I've been there, I did it, and I'm on the other side of it. I can tell you that it'll be hard at first. You have to pick a market, build a team, and it won't always go perfectly, far from it. But it is SO WORTH IT! 

I started investing out of state from CA and I’m so glad I did! If you want cash flowing rentals and don’t have massive amounts of capital this is 100% the way to go. I talk about it on my BP podcast and I’ll send you some suggestions via DP. 

@Prell Santi I take a data based appraoch to picking markets, I'm looking for affordable, growing, B class rentals. I invest in small MF. Feel free to reach out and I'll share some of my methods. 

KC is a great rental market. We achieve returns in different ways in CA-more equity, less cash flow. I hold a rental portfolio in KC and do development and a few other RE endeavors in LA. Lots of ways to make money in RE, including in expensive markets. 

@Brian Barnes You'll find that folks actually pick up the phone in these locations if you want to do some digging. I don't buy where the population is declining, stable or growing works. Supply and demand, I don't want to be in an area where demand is going away. However, you might be able to find a reason that this little pocket continues to perform and won't eventually be shuttred. Location location location not cashflow cashflow cashflow.  

I love doing cost segs on small props. I use DIY but there are others as well. I got 180k in losses from 2 quads this year. Total gold, especially Y1!