Buying Property Out of State

for your advise chris jones. That's another one of my reasonings for purchasing out of state properties here in Atlanta properties are being snatch up (cheaper ones I can afford to get in with Cash) by other investors with substantial capital or there entirely out my price to even consider putting a offer in on. I'm not so much concern about the value right now; I know markets due eventually change I want to get in before they turn around again & prices are getting hike back up. I was emailing back & forth with realtor on VA property I had inquiry on; after asking her so many questions to do my diligence in researching the area, she cut me off "saying she could not answer anymore questions until I'm ready to buy". Well I see if I'm inquiring into the area then obviously I'm serious about buying there or I wouldn't be wasting my time or her time or anyone elses asking them what I deem as important questions about the properties in that area or what are the customary closing costs for area I've never brought in.

It is great you are thinking of all the ways to make money in this down market and sometimes there are great markets far from where you live. I always think you should keep your options open but know what you may want as a long term strategy. If you would like to buy, fix and flip then you have to factor in all your carrying costs until you sell the home. In areas like Detroit, the eceonomy has been hit very hard and there are so many homes on the market. It may take a lot of time to sell or even rent a home in this type of market. There are other areas in the country where there are many homes under $5,000 per home but the areas are very challeging areas and may not be the best choice for investment real estate.

My best advice would be get a solid foundation of where you live today and take out a map. If you are happy where you live today then concentrate on an area within a 2 hour drive of your home. It is better to have properties in under a 1/2 for remodeling, fixing, showing etc. However, find the opportunities. There are sometimes opportunities in your own town. Try to make a plan to find these opportunities such as home that are truly motivated sellers, REOs, estate sales, dviorce sales, relocating sales, etc. Try the 25:1 Matt Larson strategy. If you can find a gem of a deal in your own area, it will be easier in the long run.

When you try to buy out of your area there can be challenges. You do not know the area, the contractors, the city ordinances, etc. I never have purchased property in Chicago, but I hear there can be many issues with getting permits timely, etc. Thus, I would suggest staying close to your home town area and trying to find the bargains there. Sometimes the best startegy is to find the worst home or the most anxious seller in a better neighborhood. I hope this helps. Good luck with REI. Believe and Achieve! - Joe

I have thought about purchasing out of state as well, but I just don't think it would work if you don't have anyone there to help manage it with you. If you have someone then I am all for it, but if not then try lookin in your state, I still invest in NY but just a few hours away from where I live. It is ok for me because I have a partner that lives near the properties we are investing in.

Jeremy

Investing out of state? Wouldn't it be wise to just get a property manager watch over your properties?

I mean they do take %10 of the monthly profit but as long as you found an incredible deal out of state, then your monthly cash flow should remain high while still paying off a property managers profit.

If you lease option or owner finance the property you should be able to put someone decent in the property. I would also make it clear that since they are buying they are responsible for the property. Remember this person has given you a sizeable consideration and will be more inclined to take care of their investment.

If you are giving the out of town realestate agent business; they may look in on your properties for a little less than a management company. Agents are very hungry these days.

I do like where I live but other investors have already brought up the decent stock of houses that were for sale as foreclosures especially here in the historic district where I currently live. I'm setting my focus on multi-family properties more so than SFH. The multi-family properties run into the 30's and up here in Atlanta you can't get a quadplex for under $5000 here like you can in Detroit. The Atlanta HML, I contact from Anita list, doesn't loan on Multi-family or Condo/TH'S. I have no doubt that I will have any trouble being able to locate or place a renter(s) in my rentals if I sign availability of the property up for rent thru the section 8 housing program.

As I accumulate more investments I will use a property management company with RE firm to manage my properties. I won't need the services of a management company for one property though least I don't think so.

Hi Jeremy,
If it is a killer deal, go for it. You could have a property management company handle things for a reasonable fee. Continued success.......Lubertha

Jeremy,

My two cents on out of town properties.

Remember one of the first rules we all learned when starting out: know the area you desire to invest in.

I have spent years my area and still get surprises, especially in this daily changing market.

Be careful. I have been there, done that with out of town stuff. It can be a nightmare. My advice is don't do it.

Your heart is definitely in the right place wanting to help out those less fortunate. The reality is there are already tons of investors in that Detroit area buying blocks of properties at a time.

There has to be the same type of distress where you live. With all due respect, I have a hard time believing that all the good properties have been bought up by other investors. This is a market that many of us have never seen before and never will again. There are thousands of foreclosures with more to come.

Also, foreclosures are not the only types of great deals out there. Lots of inherited stuff too, many of which you can get the owners to finance.

Just my opinion, for what it's worth.

Mitch

It sounds like you have done some research and may be on to something. The more research you can do on an area the better. If you want to go with the section 8 program determine if there is a waiting list of future prospective clients where you want to buy and what is in most demand such as 1 bedroom, 2 bedroom or 3 bedrooms. Also, determine the net amount of rent you may receive from the program and how quickly they may be able to get your unit approved and payment started. Good luck with your real estate investing. Believe and Achieve! - Joe

Many of the Intown areas of Atlanta are becoming popular once again due to the tearing down of Atlanta Housing Projects in recent years & those residents being force to seek affordable private housing OTP (outside the perimeter). I can only purchase/invest currently in a limited area of metro with my financial situation because other n'hoods of Atlanta metro remain high in price like Virginia-Highlands, Grant Park or Old Fourth Ward which still going through gentrification. Buckhead & Midtown, out of the question! Atlanta HML doesn't lend on multi-family or Condo/TH investments. I'm not tied to Atlanta, I want to diversify my REI portfolio in years to come. I'm aiming to rapidly increase my cash flow and net worth through aggressive investment in multi-family properties. I guess you can say I'm attracted to Detroit prices I mean really attracted! Now you tell those investors up there don't go buying up all property save me a piece of pie!