out-of-state-rentals

Ask David ForumCategory: Managing a Propertyout-of-state-rentals
Sam Sharata asked 2 months ago

Hi David, Hope all\’s well with your latest flip. It has been a few months since we spoke, and my partner and I have been kicking our rehabbing business into gear. We\’re just about to wrap up our second rehab, and have another 3 in pipeline. It\’s pretty exciting, but we\’re tying up HUGE amounts of our own capital into these hungry babies, and it honestly makes me uncomfortable holding too many properties. I just hope we have a seat when the music stops… I\’ve been exploring the prospect of investing in some out of state rentals, and recently signed a LOI with a seller for a portfolio of 10 units in Baltimore city (6 SFHs & 2 Duplexes) that I found on Craigslist. Having owned and managed a couple of negative cash flowing SFH properties in N. Virginia for the past 10+ years, I was frankly amazed by the returns. All 8 buildings cost less than $230K and generate $7K gross income per month, and the rents are below market. Since it is Baltimore, I guess you can call it \”hazardous duty pay\”, but in all seriousness, I am finding the ROI on these properties too hard to ignore.  Since you presently own a couple of properties in Florida and live in California, I wanted to reach out and ask you about your experience with your out of state rentals before I take the plunge. I\’m only 50 miles away from Baltimore, but I may as well be in Timbuktu, because I have no intention of driving out to these properties to unblock toilets, fix leaking faucets, or collect rent!  Since I want to use the income from these properties, I don\’t want to fund them with my SD retirement fund, and would also be curious to hear your thoughts on how best to fund these without completely draining what little remains in my bank account.  Looking forward to hearing back from you. Cheers, Sam