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Buying Rental Property Out of State | Real Estate Investing for Beginners - YouTube
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how to buy rental properties out of your
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state that's today's video let's dive in
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hey there I'm Clayton Morris the
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president and founder of Morris invest
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I'm a long time real estate investor and
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today we're going to talk about buying
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rental properties out of state out of
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your own backyard that's frankly how I
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buy all of my properties and that's what
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my team does at Morris invest so I don't
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buy any properties in my backyard which
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is New Jersey there's no way property
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taxes are ridiculously expensive
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properties are ridiculously expensive
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and therefore my ROI would be in the
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toilet so should you buy rental
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properties across state lines here's how
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to do it number one you can't do it
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alone
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so if you're going to buy rental
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properties across state lines you need a
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team you need partners in order to make
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this happen you could of course use a
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turnkey rental company like ours that's
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one of one option and I'm not selling
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you want to but you could absolutely do
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that
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the other option though is to do it
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yourself and to find properties yourself
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rehab them yourself and build that team
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but number one you cannot do it alone if
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you think you're going to do it all by
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yourself
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you're lying to yourself you've got to
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surround yourself with people that can
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help you that property management team
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contractors your insurance folks your
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title company all of those people are
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going to have to help you at some point
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so just remember you can't do it alone
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my second tip for buying across state
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lines please make sure that you just
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fall in love with ROI and you don't fall
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in love with real estate the common
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theme that I see among new investors
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they fall in love with a cute little
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bungalow the little cute little pictures
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that they see online remember all real
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estates the same four walls in a roof
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fall in love with the numbers the return
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that you're going to get on your
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investment and not the fact that it has
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adorable front little front porch and
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green paint don't do it don't be allured
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by that especially when you have twenty
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properties you're not going to care that
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property number one with an adorable
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little bungalow so fall in love with ROI
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your return on investment and your
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numbers not real estate step three what
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legal entity are you going to be
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acquiring these
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properties in and where are you going to
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set up this legal entity like an LLC or
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an S corp personally for us we have
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LLC's set up in two different states
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where we own our rental properties now
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I'm not an accountant or a lawyer so
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seek the counsel of your own accountants
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and lawyers on this but I will say that
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our our accountants have advised us to
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set up LLC's in the states where we own
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our properties that way the LLC owns it
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and you're protecting yourself from you
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know being sued and then your other
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assets your personal assets are then
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protected against from the LLC very very
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important to know what type of a legal
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entity you're going to set up and where
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you're going to set it up it's very easy
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to do also just by going to the States
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Department of State website so if you're
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buying them for instance in Michigan you
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would go to you know state Michigan gov
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and click on the start new business tab
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and you can be up and running in moments
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it's usually like a hundred dollars to
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set up an LLC number for property
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management if you're going to buy out of
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state don't think that you're going to
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manage that property by yourself okay
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you're going to need a property
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management team that's going to be able
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to be there on the ground deal with the
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Board of Health when they decide to
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drive by and send a violation letter
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they can handle it they can get right
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out to the property make sure that the
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branches are removed from the gutter
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make sure that the debris and trash is
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out of the yard whatever it is but you
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need a great property management team
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that can manage your property from afar
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you do not want to try to do it you do
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not want to try to receive phone calls
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at 2:00 in the morning from an angry
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tenants you are an absentee landlord
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don't do it don't make that mistake
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number five this might be the most
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important tip do some research but not
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too much research I see analysis
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paralysis all the time for people who
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rely on the internet now look let's be
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honest you're out of state so you're
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going to spend a lot more time on the
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internet doing research about the
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properties and areas and neighborhoods
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that you're going to buy and that's fine
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but remember that the internet can only
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get you so far
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and at some point you just got to take
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action get a good idea of your returns
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make sure you know your ROI make sure
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you've got a great property management
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team and don't spend too much time
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hanging out
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internet forums and reading crime data
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websites which are mostly inaccurate to
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begin with so spend a little time doing
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your research but don't let it be
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debilitating and stop you from taking
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action it's really really important step
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six in my process of buying out of state
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get in inspection this is incredibly
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important so you're buying a property
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maybe it's already rented or maybe it
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doesn't need any work so to speak get an
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inspection on the property now chances
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are if you're working with a great team
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they're going to go through line by line
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on that inspection and try to square any
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inaccuracies or problems with the
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property inspectors are paid to nitpick
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so they're going to find anything
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they're going to find tons of stuff I
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mean that's what they do so I love
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inspectors but they're going to find
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stuff that's what they do some of it may
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be totally irrelevant right - turning
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into a great rental property but some of
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it might be important and therefore you
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can square that with your contractors
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making sure that they are fixing this
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taking care of that but getting a
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inspection you know let the realtor know
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if you're working with a realtor you
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want to get an inspection on the
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property you're going to spend $500
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whatever it is but then you have all of
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that documentation there you can hire a
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contractor to come in maybe it's going
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to cost you ten fifteen twenty thousand
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dollars to rehab the property but now
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you know all of the things that you want
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to fix in the property and you can hand
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that right over to your contractor to
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get it up and running and get it fixed I
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mean at Morris invest we work with you
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know investor excuse me inspectors all
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the time who once you know do an
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inspection we'll go through line by line
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and match it up with what we're doing on
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the rehab and make sure that it all
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lines up or if something's missing one
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way or the other then we'll address it
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with with our industrial that way so
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inspections very important go through
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them pay for it get it done get an
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inspection especially if you're buying
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across state lines and step 7 in my
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process is to relax okay if you are
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buying rental property for positive cash
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flow and creating more legacy wealth in
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your life that's the whole point so sit
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back and let those rent checks start to
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come in and don't nitpick over every
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little thing and don't be annoying
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you're going to cause yourself way more
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stir
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less than you need to if you and your
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wife sat down your wife and husband sat
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down your plan was to acquire 20 rental
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properties and create a certain amount
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of cash flow and that cash flow is
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starting to come in and your own
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property 3 in property for now and you
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start to see that cash flow coming in
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every month like clockwork
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relax enjoy it go take that vacation if
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you wanted to take but that's the whole
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point of creating cash flow is to enjoy
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it to create that life that you want to
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create that financial freedom right so
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sit back relax and enjoy the rental
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property experience that you're on click
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description for this video below we'll
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see you back here next time everyone go
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out there take action and become a real
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estate investor and relax
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