Buying Property Out Of The State
Hello All. I'm very new to RE investing and hope to do well with the help of all of you in buying properties to keep as rentals. I was recently presented with an opportunity to purchase property in Atlanta, GA that is already rented and will provide over $20k in cash at the closing. As I live in Southern California, this property selling for $160K and providing cash at the closing sounds like good potential, but then of course I am very unfamiliar with the markets there. I'd like feedback from any of you regarding your experiences buying property out of your local markets. Do you recommend or not? How do you handle all of the details of managing your properties while not in the vicinity? Thanks for your time in advance. 
Not sure how you plan on buying the property, but check out this recent article that has been the subject of many posts lately. This may or may not help http://cbs11tv.com/localnews/local_story_274155216.html [ Edited by DaShow on Date 10/11/2004 ]
Hi, I live in Atlanta and I am helping my friend from Houston buy some properties (that I manage with a friend) in Atlanta. They are rentals. If you would like since I am drving and looking at these places anyway, I will go by yours and let you know about the area unless it is any of the areas listed below...I'm not going to even try I claim to know market rents, rentals, ownership, neighborhood...its all OTP (outside the perimeter to me...lol).
I have lived in Georgia since 1983 and moved to Atlanta in 1996. I know the areas well (except for extreme south atlanta and suburbs and 85N suburbs).
If its in the city, I know it. Send me an email at **Please See My Profile** and let me know if you want a drive by and/or an opinion.
Michelle
I invest out of state & I own 2 businesses, so if I need to get up & go, I can & do. I am on the front end of ALL my deals. If I'm buying, I inspect it, get area info & make I choose the lender/broker to make sure I'm getting a good appraisal. While in contract I ask for a copy of the appraisal & check the props myself so that I can become familiar with the comps. I also call & chat w/those in the tax assessors office & registrar of deeds. In the south, those offices have much more friendly people willing to talk & share info (vs the northeast).
If someone finds a prop for me, I work their fee into the deal. NEVER, let anyone tell you they will "take care of everything". Unfortunately, these are the times we are living in. Common sense rules.
Here's another article for you:
NY Times
Losing Your Dream Home
October 17, 2004
By JOSH BARBANEL
http://www.nytimes.com/2004/10/17/realestate/17COV.html?ex=1099479310&ei=1&en=9971957cd2dcefc1
I tried to invest in virginia from washington state. I tried first on my own, I would not suggest it. it was a mess. I had to take the word of agents and lenders I had never met. plus home inspectors I knew nothing about. I had a deall go south at the last minute that I blame on the fact that I didnt know the area well enough. then I picked up a partner in that area. so far things are going great and we plan on closing on 2 sfr this week. he was local and new alot of good connections. although I will have to split the profits with him, I also got to split the costs, headaches, and responsabilitys to. plus he was a good friend from college which made it easier.
I too am looking to invest out of my area. As where I live is expensive and very competitive. Because houses have appreciated so greatly in my area, we are sitting on a lot of equity, that we would like to "put to work." I'm looking to buy homes wholesale to hold and rent.
I think having great property managers is the key.
My plan is to network with wholesalers, lenders, property managers, home inspectors/appraisers in the areas I'm looking into.
The areas I've been researching/focusing on are Atlanta, Jackson, MS, Jacksonville, FL and Buffalo, NY. Does anyone have any experience in these areas?
I am in the same boat that you are--- being in CA and trying to make cash flows work. I own properties in several states and am happy that I do. Congrats on being bold enough to take a serious look at the out-of-state opportunities.
You should definitely talk with property managers to determine what the rental market is like. i.e. How easy is it to rent your type of unit , What are typical vacancy periods, what do you put in your leases, is it easy to rent in all areas of the city, etc.
You also should talk to investors and real estate professionals to determine what the price trends have been. You can augment this by looking at Housing Price Index data on the appropriate Metropolitan Statistical Area published by the U.S. Government. You should also push on the investors as to what their experience and feelings are about investing in your target area.
As always, do your due dilligence on the property. My experience so far has been very positive although I am in one area with soft rents. The compensation is that the property was purchased well below market.
At one time, my wife and I owned investment property in five different states, none of which was our domicile.
If you have the temperment for long distance landlording, go for it if it makes good business sense. I have since consolidated all my rental property into two different states and have all properties professionally managed.
The most significant hurdle to overcome with out of state landlording is finding a management company. Once you have a professional property management company on board, the rest is downhill.
Thanks Ed and New Kid:
You've given my some renewed confidence... it was wavering there for a moment.
How did you guys find your properties? Do you just buy from area wholesalers? How did you come up with the areas you invested in?
I'm approaching it by first researching areas to invest in then work on developing contacts in the area.
Also my plan was to use my home equity line to buy then refi... I was hoping to get properties at 70% (or below).. refi at 80% (as long as it still cash flows) and walk away with some $$$.
I'm I approaching this right?
Just be careful in Atlanta, I am in Charlotte and have looked at numerous opportunities in Atlanta. in the last five years there has been a lot of real estate fraud going on there. Call around and talk to a few appraiser and they will verify what i am saying. I almost got taken by what I thought was a great opportunity until I quickly dicovered that in this case the comps actually did lie. I left Oregon (same type of market as CA) just one year ago to invest in NC, GA, and FL and all have been good. Atlanta was the only area I almost lost my shorts.
Yeah, as I've said numerous times on this board, before DON'T trust ANY comps, or ARV's posted by 95% of the wholesalers here. I can refer you to an honest appraiser or two, if you want... Also, I know a realtor that works a lot with out of state investors, manages their properties/purchases for them, that I can give you a reference to.
PM me if you're interested. Oh, and I've just used their services, I won't make a dime from the reference, just as a FYI. I just hate the bad rap Altanta's getting, 'cause it IS a good place to invest, you just gotta be VERY careful...