Tips for investing in out of state properties
There are times in your life when in order to change your future you have to make decisions that others may question.
That is the case with investors who would want to build a rental portfolio or invest in real estate but their market is so crazy that a 2/1 shack is 200k or the taxes are so high that they cannot get a positive cash flow. So what can you do?
Search for properties in another area or even another state, which are affordable and give you positive cash flow.
There are a lot of areas that the news never talks about because they don’t have 50 percent appreciation in a year. They simply steadily grow at a measly 3 to 5 percent, and guess what When the Bubble burst they also didn’t have 50% depreciation in a year. In fact, they just hang out and many people just don’t even notice.
What is the key to finding a stable area that won’t blow up or down? Here are 7 steps to finding out your area properties to invest in.
1. Look for areas that have a strong rental market. Meaning an area where a good majority of houses are owned by investors who are renting property. This will tell you that the taxes are low and the rent rates are high enough to attract investors who want cash flow.
2. Find the areas that other out of state investors are buying in. Google is one way that comes to mind. Craigslist.com is also a very good source. In fact, I think it is one of the best sources to find good deals.
3. When you find the area, talk to people there about the markets overall appreciation. Find a market that is quite boring, one where no one really ever understood all of the hype about the real estate bubble because it wasn’t happening there.
4. When you find the area that other out of state buyers are buying in, the work begins. You are not there, so someone will have to do your legwork. What is the best way to find the local deals? Find the local wholesaler!
5. Just like a spy gathering intelligence, find somebody who is connected, who is the big dog dealer around, and try to get him on your side. That is what you should do to find the best deals in the area.
6. Find the hard moneylenders in the area. Guess whom they will be friendly with? That’s right, the local wholesaler. Find the moneylenders, and you will find the best deal finders. They will be the ones constantly finding great deals and bringing buyers who need to borrow the money. Easy - just like a spy!
7. Talk to the wholesaler in your area. It’s less work and much easier than working with realtors. Be sure to do some checking and asking around, make sure he or she is the big dog, so to speak. They run the volume-based business so they mark the deals up just a few thousand and move them so they can keep buying more properties. Besides, the local wholesaler is going to snatch all the best deals up anyway because they are going to have all the relationships with the realtors anyway and get 1st call on the deals.
In general, for the work the local wholesalers do - looking at hundreds of houses and making hundreds of offers to get their deals - they are more than worth the measly mark up they make. Let them find you the best property mangers and contractors, let them find you quality properties faster, let them help you achieve your investing goals.
Then what? Start working, do some deals, build your cash flow, and take charge of your future. Be Bold and Courageous, you won’t regret it!
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