Building a Long Distance Property Empire One House at a Time
The first question always is…How are investors able to successfully buy and sell properties through long distance investing without ever seeing the property? How is that possible? I can say it is possible as we live in Lisbon and been working in the NW and NE for 5 years and have bought and sold over 120 properties and counting. The way to make it possible is to have honest partners that share the concept & benefit of a long term relationship. This honest partner can be a local hungry estate agent who can handle sourcing, sending you videos of the interiors of the properties and monitoring the builders. After the refurbishment the estate agent diligently manages your property & you do another one. The key is mutual beneficial long term interests.
It sounds easier than in reality to find the right person on the ground however it is do able as we have run our property business since 1994 and always had JV partners. Sometimes they think that they outgrow you, but the smart ones stick around and prove their integrity. Integrity is what makes a business.
Going forward, you need clear cut goals & parameters. Are you looking primarily for cash flow or appreciation? The hope is always for both, but in most (not all) markets it tends to sway one way or the other. NW and the NE tend to cash flow better, but might be said appreciation might be lacking. I personally would not suggest buying for appreciation as it is unknown. Cash flow is king for us. We have approx 40 properties in the NW and NE and have double digit net returns with the social housing we work with. No voids, no management and virtually no maintenance. Each of these properties are like mini oil wells providing net income for the net 10 years as per the leases. Besides mini oil wells these properties have babies. Every 4-5 months we have self generated just in rents enough free cash flow to convey on another mini oil well. The story continues and continues with additional cash flow.
Best way to start making connections in new cities out of your immediate area is to determine a few places you are interested in and look for investors local to that market through a PIN meeting. Try to connect with them and start looking for referrals to find a good investor agent and/or property manager in that market. If you can find a good, reliable agent and property manager then you will have a great start as they have access to data and knowledge of the local market. You might even consider JVing with a local investor if you are liquid.
A property manager or estate agent who can educate you on a market, help you form a strategy, fit right into your due diligence process, and execute on a clear takeover game plan as soon as you hold ownership. Research and contact several property managers/estate agents in the area, ask any questions you have, if they are willing to help you with that then you are going one step in the right direction.
Know the Rental Demand: This keeps vacancy and turnover down (resulting in lower maintenance too), and tenants tend to behave because they know your place is a hot commodity.
Once you have settled on a market and made a couple connections there, I would go to meet them and get to know the area through looking at neighborhoods and houses so you can really see what and where you are buying. It will give you a great opportunity to vet out the people you are working with in person and help you know whether or not you feel comfortable investing there.