Real estate investing is exciting, and there’s no shortage of strategies including buy and hold, flipping, wholesaling, etc. But what about when your local market is just too expensive to get in the game? Both international and American investors can look at less-expensive markets, at least to get started. If you’re in New York, California, London or Hong Kong, for example, there is no shortage of less-expensive markets you can look at.
There’s an article on choosing the right market here. Now let’s talk about executing and building your long-distance team.
Building Your Team
With modern tools, just about anything can be done remotely. Use the aforementioned article to guide you in selecting a buy & hold market, then build out your team.
You’ll likely need:
- Real Estate Broker
- An attorney licensed in that state
- Leasing agent, assuming you’ll be renting the property
- Local contractor team, or a Property Manager with those relationships
- Property Manager
- *If there’s a strong super or another local contact, you could get away with using a remote VA service such as Hands On Tap, and save on the management fees
Local lenders may not lend to someone who isn’t local, but mortgage brokers and any of the big banks with a branch in your area may be able to help with financing.
Not sure where to start with building your team? Find a deal online, and reach out to the listing agent. Ask them for referrals to other people, and start calling. Ask each person to recommend others in your target area. When you talk with enough people, you’ll notice which names come up consistently – those are the ones you’ll want to talk with. Alternatively, start by reaching out to someone on BiggerPockets, which has worked for me in the past.
Real Estate is a relationship business, so make sure your team is good with people. Your Property Manager & Leasing Agent, for example, will need to deal with tenants, prospective purchasers, etc. Call them up and try having a conversation. Are they generally helpful? Easy to talk with?
When you find the right people, let them know your plans. Tell them you’re only interested in working with them as your local broker in that area (or attorney, etc.), and build some trust. Ask to see a copy of contracts for each team member to get a sense of how they’ll do business.
When you find a target property, documents can be signed electronically and funds wired from your local bank. For property inspections, your team can refer you to an inspector who can send you an electronic report.
Your attorney may want you to find a notary local to you to verify your ID and sign some documents in person, such as mortgage notes. This can save you some travel expense so you don’t need to travel for closing. Virtual closings are possible.
If you’re feeling nervous, start with an inexpensive project.
Other Strategies (Wholesaling, Flipping etc.)
Remote wholesaling is difficult, but not impossible. Leads can be generated from online sources. You can take out local & online advertisements, publishing your toll-free phone number and email address. Advertise on Craigslist, search public records, and send letters in the mail. None of this requires a face to face interaction. Conversations can take place remotely, and documents signed electronically using DocuSign.
Flipping is quite possible remotely too. Start with a small project and grow from there. Ask contractors and other points of contact to send you pictures regularly. Implement a system where one team member (property manager / leasing agent) validates work done by another (contractor).
Maintain your relationships with regular phone calls to stay on top of things. Sending a small gift at the holidays can also go a long way.
Have questions? Feel free to get in touch.