"investing in real estate out of state".

In the edge 2012, Dean says that to pick a new market to REI that is not in your backyard the following 4 criteria are important:

1)Migration stayed the same or going up
2)unemployment same or going down significantly
3)rents have stayed the same or gone up
4)markets are still flat

Not quite your question, but relevant if you continue to invest out of state.

Yes that is a good point you bring up but it seems that there would be so many things that could go wrong and you can't even look at the house to see what it is like.

Yes, I have done that and know a number of people on here who have.

You have to have some kind of boots on the ground in that state, whether it is a partner, a handyman/contractor, family member or someone that you can trust. And hopefully, at the end of the deal, you still feel that trust.

It is riskier but it is done all the time. Just be careful.

Karen

Every month we are buying-fixing-selling and sometimes holding paper on the deals. Investors on my end make 18% return on their money and my crew on the other end split the profits with me 50/50.

Hi there!

We have done just that during the past two or so years. We are based in the State of Washington, and our market is Indianapolis, Indiana.

Right now we're holding five SFHs and flipped the rest. drjonmiller and Karen brought up great points. I will dig deeper on what they point out.

1. study your market very carefully. What drjonmiller points out is part of this. Start calling property management companies and ask them where people are moving to within the market, which areas are suitable for rental properties, etc. Often good property managers have a really good grasp on what is going on in the market. there are many other ways to study the market, too.

2. start building your power team. This is what Karen points out. This is so critical that I cannot emphasize enough how important having a good power team is. Remember you are like two time zones away from your market where you may have not even visited before. Your power team members are your eyes and legs. Your power team should include 1. realtor, 2. contractor, 3. property manager, 4. insurance agent/broker, 5. project manager, 6. home inspector, 7. appraiser, 8. title/escrow company. You need to screen them carefully.

3. find hard money lenders that lend on deals in your market. people here can probably help you. If you are tight on cash or access to conventional financing is limited, you need them for flipping.

Also, once you have a few solid investor friendly realtor, you can ask them to put you on their automated alert system, so you can receive email notifications of newly listed properties and status changes.

I also suggest you take a class on this subject or maybe read a book or two.

there are many others things you need to know when it comes to investing out of state.

Let me know if you have any questions.

Matt Inomata
Bothell, WA

Thank you for the information Karen. I do have a friend in Florida and in Georgia but I don't know what those markets are like.

But even with this how would I go about finding some properties in these areas while i'm in california.

The internet is a beautiful thing!

You can access realtor.com for MLS listings, CL, FSBOs and many, many things. Place ads on CL aimed at buyers and sellers. Get a good realtor on your team there. Train your partner how to do Driving for Dollars.

Gary and Jill Ceriani are on here from FL. Michael Lopez, who was on Dean's telecast on Sun. They are doing deals ALL the time. I know that GA has some great things available.

You can do whatever you set your mind to do! Who is going to stop you?

Karen

Thank you for your help with this. I feel i am getting closer to what i am looking for. Do you know Gary and Jill Ceriani's I.D. on here and also for Michael Lopez? You can PM me with the information if you wish or maybe you can contact them and ask them to contact me I really would like to talk with them.

Yes, I have been investing out of state for a few years. I've bought and held. The best advice is building your team. I am in California, and I have properties in houston and atlanta. Your property management team is critical if you are buying and holding. But all the members of your team are very important. But the breakdown above was very thorough. I am going to start in the midwest, new team to build. Once you do it, you will realize how fun it can be. You are the boss, so if people don't work out, then you get rid of them. But you can do it.
Jeremy

I can find you wholesale properties in Kalamazoo County, MI. Send me a PM if you are interested in that location.

gceriani This is Gary and Jill's.

I don't know Michael's but he is on FB

Karen

Mike Lopez is: Mike L

Matt I can see by your response that you must have a great deal of knowledge in investing in other states and I want to thank you for your information that you have shared with me. But how do you pay these people in another state do do a lot of this for you? I know that people like realtors might help you with no pay but inspectors and such would not be so willing to just look at your house to let you know if it would be a good buy with out getting paid for their services.

Ali talked about the best way to do that. If you can watch that event video you will find a wealth of information on how to invest out of state. I watched it today and wow!

Where would I find this video by Ali?

That is where I saw it. Also maybe someone has a copy at home. I think you could also order it on this site at the top. Tammy

Hi there! Good morning to everyone from the great Pacific NW! Fall is here! Leaves turning colors and the air is crisp!

Anyway, of course you need to pay your home inspectors for his/her service. But you won't send him/her to a property until you have the property under contract(I will address the Q you probably have later on). At that point, the deal is making sense to you number-wise (you would use a ball park figure, say $7k or something for your estimated rehab).

As soon as you have the deal under contract, you would get the combo for the lockbox and send the inspector to the house. Usually he will point out every single thing he finds in his report.

I will go one step further here. So, what do you do with the report???

By this point, you have already found a few contractors to work with. You would send them the report and ask them to come up with a repair/rehab estimate. Make sure to tell them this is a rental property and the house just needs to be clean and functional. If they try to address every single item in the report, your rehab would cost you a lot. Look at your rehab as numbers not as fixing a house.

You might be wondering "what if the inspector finds something super major? The seller already accepted my offer and aren't I stuck??"

Two options you have. 1. re-negotiate the purchase price or 2. get out of the contract.

In order for you to do #2, you need to put an escape clause in your purchase/sell agreement, so you can get out of the contract. Otherwise you really would be stuck. you just need to say "Purchaser can cancel the contract based on the result of the inspection" etc. But I would check with an attorney on the exact wording.

I hope this helps!

Matt Inomata
Bothell, WA

Hi Lifequest. I live in NYC now and I have been investing in GA (where I grew up) and Nashville, TN where my ex-wife moved with my son for a year. It is more challenging and you HAVE TO keep a good team.
I found my first place in TN (was $50k and it rents for $900/mo) with my broker/manager. I found my place in GA when another deal fell through in the neighborhood (was $20k and it rents for $625/mo)
Right now I work with a broker who manages my holds, one for 1 part of town and a broker for another part of town. They all bring me good leads but the manager is slow to bring leads so I use the other guys for listings.
I have a roof guy, a title agency, a plumber and a handyman.
I close my first assignment in 10 days and I have another multi-unit deal in the works as well.
I see my son in Nashville once a month until the end of the year when I move down there. I look for properties and buyers on my trips to see him so it becomes a tax write off also.
Just stay with it and quiet the voices in your head that say you cant do this. I have been making a small income from property for a year and have not used my own money for anything except lawn care while my GA property was vacant.
I still have not seen the inside of either property except thru pictures. It can be done. I'm proof.
Stay with it.
Andy

I am investing out of state; for me, it's been key to have 1) a great real estate agent, 2) a great handyman, and 3)a great property manager.

I also have an insurance agent who I can call and we take care of things over the phone.

My re agent and handyman check out the properties for me (I look for them on the Internet, or they point them out to me), send me pics, give me estimate of repairs needed; my property manager finds good tenants, takes care of the leases, deposits, credit checks, etc.

Once the properties have tenants in them, there's not a whole lot to do anymore; your handyman can take care of any maintenance issues, and you just start receiving your monthly checks; you can set up the insurance payments to automatically get paid from your account, and you pay taxes annually...

If you have Section 8 tenants, your properties will have an annual inspection to make sure everything is in working order.

If you don't want to deal with rehabs, etc. just buy turnkey properties from other investors who already took care of the rehab, got tenants in, and a property manager on board.

Wishing you success,

Thanks Andy for the information. Sounds like you are doing pretty good there in GA and TN I think once I get going it will become easier and everything will fall into place more. I'm not sure if I want to buy and hold or just do some lease options or wholesaling.

Great comment on Sec 8's annual inspection requirement, valuni. I will take one step back, actually, and want to point out that in order to have a Sec 8 tenant, your property must pass their inspection first.

This can be costly if the inspector finds a lot of things to repair. One of my properties in Indiana just went through its annual inspection, and it cost me several hundred dollars. That is ok, though, since I'd much rather have Sec 8 pay me. They always pay and are on time. You gotta love that!

lifequest_53, if you decide to buy and hold, you need to be ready for unexpected stuff and a few bad tenants. I've had my share of them. The fact is, you will have bad tenants no matter how hard you screen your applicants. And my advice to you when you have bad tenants is 'don't listen to their sob stories. Be firm and objective. Make business decisions, not personal/emotional decisions.'

One thing I learned from renting out houses to people is that bad tenants LIE.

Good luck!

Matt Inomata
Bothell, WA

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