I’ve been wondering whether investors hone in on a sweet spot within their hometown market and even if the market dries up with low inventory do you wait-it-out and obsessively check for new and upcoming listings or do you venture out beyond into neighboring states to invest when you’ve found that your area is temporary dried up?
What have been your experiences, good or bad?
Hi,
This all depends on whether your married? Whether you have kids? Whether you have no commitments where your counted on, on a regular schedule or basis?
I can pretty much wholesale properties from any state from my home city, but if I was looking to do a fix & flip, buy an apartment building, show a wholesale property, or buy a long term rental I will pretty much need to put my feet on the ground until an experienced team I trust is in place and I understand the market.
I have made investments during my career in over 45 states, but I have also lost money in a number of states because I did not understand the market and got sucked into making an investment I was leary about but did not pay attention to my sixth sense!
There are a few cities or states I would not go back into, and others I would make investments if an opportunity came up but I very clearly have had both good and bad experiences!
GR
I can fairly answer YES to the first three questions!
I appreciate the insight. I agree that a trustworthy team is essential to invest out of state. You mind sharing the city and states that you wouldn’t go back into? (no offense taken if one of them is mine!)
A good investor should not be limited by Geographical boundaries.ROI is the focus
My basic philosophy is not to say something can’t be done. I may not know how to do it but that does not mean it can’t be done. That being said I have heard tall tells about people making money investing all over the USA and the world. I believe that to paraphrase Tip O’Neal all real estate is local. I have not seen anybody that has actually done it outside of investment partnerships that contract with local talent for local knowledge. I have, however, seen lots of people that make money investing in known local areas. I would invest where I am so that I know the difference between a $1000k 1500 sqft house on Collingsworth street and a $100k 1500 sqft house on Cypresswood street. If you can’t make money where you are I recommend you do as kdhastedt used to say move closer to the food.
If you are going to flip properties after rehabbing them, it is going to be very difficult to do that out of area. If you hire someone to do all the work, your ROI is going to be very low. It will probably not even be high enough to offset your risk.
If you are going to wholesale properties out of area, you are going to have a hard time finding buyers.
If you are looking to buy rental properties, now you are in the right spot! Leaving a poor market and finding areas with low prices, an improving economy and high rent demand is a great way to dramatically increase your ROI. You must however find a good recommended property management company that can handle the day to day operation. Though this will cut into some of your profit, it is well worth the peace of mind and you will still benefit from the resale.