Out of state investing..can it be done successfully?

Those who only invest in their own backyard are amateur investors who are unlikely to do really well over the long term.

mthein,

Congratulations. You are the winner of the award for the dumbest statement ever made on this forum!!!

Mike

I’ll send out the trophy this week…

I live in Mass and have begun to look into investing in South Bend, Indiana. There is an investment company there that sets up the PM, etc.

Anyone have any advice for investing in this area?

Thanks.

There is an investment company there that sets up the PM, etc.

If this is one of those “turn-key” investment schemes, typically the only one that does not make money is the investor - i.e. YOU!

Mike

Do you have to fly in everytime to meet sellers or to show your properities to buyers/tenants?

If you are already familiar with the area and have a management team in place, then no you don’t have to fly in everytime – if at all. I have been investing in MD where I used to live even though I have not been there for the past twenty years. I have a good real estate agent, a good property manager, and a good repair contractor on my team. I have bought, rehabbed, leased, and sold some rental property without ever seeing the property.

If you don’t have good people on your team that you trust, then investing at a distance may not work for you.

Do you have to be present to present your contract and have it signed?

No you don’t have to be present. Your real estate agent can present and receive purchase offers for you. Fax signatures are acceptable. Nothing has to be done in person.

Do you have to fly in/ be present at closing?

No you don’t. Settlement can be done by overnight mail/FedEx. Even though I live in SC, I have purchased property in MD, NC, TX and even my own state of SC with settlement by mail/fax.

How do you protect your interest; to ensure you are not left out of a deal you put together if one is not present?

If you are trying to flip property, then this is something you may not be able to completely control. Even if you are present in person, you may still be shut out of some deal you are trying to put together. I would generally suggest you do your wholesaling and flipping in person. Eliminate as many middlemen as you can to maximize your take on a deal.

How can one become a successfuly out of state investor?

There is no easy answer here. You have already received some good suggestions. Success depends upon your experience and your team. Often success is merely the end result of trial and error. The school of hard knocks does not offer scholarships.

out-of-state rentals can be a real headache without a good management team.

http://www.reiclub.com/forums/index.php/topic,28986.0.html

Well I havent read all the posts but let me throw my 2 cents in. I have been coaching and mentoring folks around the country how to Invest 1000 miles away from home successfully and all I have to say is I love it. We currently own property in 3 states and flipped 10 properties in 06 that were at least 1200 miles away. some were rehabs and some we just wholesaled. Out of State is no riskier than investing in your own backyard. AS long as you have the will, knowledge and time to put into it.

Out of State is no riskier than investing in your own backyard. AS long as you have the will, knowledge and time to put into it.

I think that is stretching the truth a bit. Can long distance investing be done successfully? Yes. Is it more difficult? Absolutely. The reason is that you don’t have access and direct supervision of your project. If you were going to start a new hardware business, would you open it 1,000 miles away?

Mike

there are a lot of sucessful real estate properties in texas and flordia that you can invest in right now

there are a lot of sucessful real estate properties in texas and flordia that you can invest in right now

Show me the numbers! I’ll take a BUNCH of them if you can show me how I can simply sit by the pool and collect those big rent checks!

Mike

I know this for fact because I am writing the contracts. As I said also ,"Out of State is no riskier than investing in your own backyard. AS long as you have the will, knowledge and time to put into it."Stretching the truth would be saying that you can invest out of state and have others do all the work for you and make a killing. I currently own property in 3 states and therefor I have 3 backyards. I t cost me less to fly there and check on things than it does most investors to fix 1/100th of their mistakes.The key like I said is . Will Time and KNOWLEDGE.Investing :PERIOD: is risky if one is not fully educated on both the good and the bad. And investing is gambeling weather its in your own back yard or someone elses. If you know the market you are working in. then Have at it. No I wouldnt open a new hardware store 1000 mile away but I would open my franchise store 1000 miles away. :smile

Hold on there a minute.

I t cost me less to fly there and check on things than it does most investors to fix 1/100th of their mistakes.

You’re comparing apples and oranges. The expense of flying somewhere has absolutely nothing to do with mistakes newbies make. Newbies will make mistakes whether they invest close to home or not - the distance certainly doesn’t stop you from making mistakes. The expense of flying will always be an ADDED expense for investing long distance and that expense IS decreasing your cash flow. When I invest in my backyard, I don’t have an “airline tickets” expense. That is an expense that is completely eliminated when I invest close to home.

And investing is gambeling weather its in your own back yard or someone elses.

That is blatantly wrong! Investing is NOT gambling, not even close. I don’t buy a property unless it is a sure thing. When you pickup 30% to 50% equity and have a positive cash flow, that is as close to a sure thing as you’re going to get in this world.

Let’s get real here. Investing long distance adds expense and risk to the deal. You no longer have easy access to your property and you have lost some direct control. That is simply the truth. For people who live in bubble areas, that still may be a better option than investing in a highly overpriced area.

Mike

It really depends on what market you live in. It could actually be riskier for me to invest in an apartment bldg in my area then it would to invest in another state.

I don’t consider out of state investing risky. The reason why one would want to invest out of state is because it’s typically more profitable and less risky then an asset in you own backyard. Sure you can keep an eye on it, but what good is that when the submarket rental and occupancy rates are falling.

What is risky is people investing out of state who really don’t understand the dynamics of market and those who don’t have a plan to carry out their objectives. You need to have a good plan to make anything work.

We are a group investing out of state. I live in NJ, my partner lives in AZ. We are bringing in his property management company of 25 years into this new submarket. They will eventually open a new office there and they are also a Principal in the deals. This will lower expenses and maximize potential. They have also managed properties in this area in the past. Is this riskier then investing in my area? Not at all.

Mike is right investing in real estate is not gambling. When I find a house that every house just like it has sold in the last 3 months for $100k. That needs $6k in fix up costs and I can buy it for $50k. There is no gamble there. The only way to not make money on this deal is to get greedy or lazy. If you follow a proven plan you will make money. There is no gamble here.

Though I am a half full glass person. And a numbers freak. And an over analytical miser. Investing in ANYTHING is a gamble.I buy a house at 30%equity and the next day the Damn thing burns down. Yeah the insuranse will help but what about the deductable and the holding of the mortgage until the rebuild. Folks life is a gamble. We can reasure ourselves with whatever it takes to make us reach into our wallet and sleep at knight but there is risk in merly being alive.

Not right. My insurance policy includes rental loss coverage @$1000/month while I am building my house back. If done properly there is no gamble in real estate.

When real estate that is done right stops working, we will have been hit by a Russian invasion and we are all living in the hills.

If only you could buy 50 cent on the dollar ONLY NEEDING $6k to make it $100k. Those deals are sweet but fewwwwwwwwwwwwwwwwww and farrrrrrrrrrrrrrrrrrrrrr between.So few and so far not even considering reality. Just simply a plus to a gloomy reality.

If only you could buy 50 cent on the dollar ONLY NEEDING $6k to make it $100k. Those deals are sweet but fewwwwwwwwwwwwwwwwww and farrrrrrrrrrrrrrrrrrrrrr between.So few and so far not even considering reality. Just simply a plus to a gloomy reality.

Yes, they are few and far between. Yes, every phase of running a real estate business requires work. That’s why everyone doesn’t do it and the majority of those that try will fail. Being successful requires a LOT of hard work, persistence, and thick skin.

Mike