Given you are probably not going to be investing close to your home if you are using analysis to guide your decision, you are going to have to build a team of local professionals in the city you have selected. Here is the team you should think about assembling:
Property Manager: In my opinion this is the most important member of your team. Spend a lot of time in the selection of this person/organization. Not only will the property manager be responsible for finding and retaining tenants, they will also be responsible for addressing any tenant issues, collection of rents, handling of contractors for repairs/maintenance, monthly reporting and the handling of typical operating expenses. They will be your eyes and ears while you focus on your current responsibilities outside of real estate investing. Property managers will charge roughly 8-10% of monthly rents and typically include a fee to secure new tenants. You simply start with a simple google search such as “single family home property manager in City X”. From this list you start filtering based on reviews and visiting their website. Once you get a feel for the size of the organization (I would recommend mid-size organizations with at least 10 years of experience in the local area). I would select at least 3 to conduct phone screenings. Phone screenings need to be able to test the knowledge of the property manager. Ask them how many properties they manage, ask which areas (zip codes) are classified as A, B or C areas, ask about mortgage brokers, lawyers, realtors, 1031 exchange firms that they would recommend? Ask them to send you some previous deals that they have worked on with clients and ask them to comment on what made these deals successful. If you find a good property manager, they will assemble the rest of your team for you. I can't stress about the importance of securing a strong property manager. If you find a good one they will assemble most of your team below for you.
Realtor: In my experience, it’s best if the property management and realtor are independent from one another. I still get my property manager to vet any houses but having separation is still the best approach. Again, selecting the realtor is easy if you have a strong property manager. The property manager should already have a significant portfolio of homes and they will know which realtor has found the best deals for their clients and which ones haven’t. Again, they will make the introduction and as long as you outline your goals up front, the property manager can direct you to the realtor that is best suited for your defined goals.
Mortgage Broker: Again, ask your property manager. Your mortgage broker should be local to the city you are going to invest in and I don’t think they need to be a large national provider (some of them have stringent requirements and not as flexible as some smaller local brokers) They should be flexible enough to handle out of state investors and be able to handle transactions that are going under your personal name or LLC (Limited Liability Corporation). I will talk more about this in my next current projects section.
Notary/Lawyer/Insurance Agent: Your search (after consultation from your property manager) should be focused on finding someone that is able to handle document signing for out of state investors. You goal is to not fly or drive down every time you make the offer. Trust your team. You can accomplish everything without ever visiting the property. I do think it’s worthwhile to visit the city once you have chosen it as a place to invest in to get a sense of the neighborhoods but it’s not absolutely required.
Property Manager: In my opinion this is the most important member of your team. Spend a lot of time in the selection of this person/organization. Not only will the property manager be responsible for finding and retaining tenants, they will also be responsible for addressing any tenant issues, collection of rents, handling of contractors for repairs/maintenance, monthly reporting and the handling of typical operating expenses. They will be your eyes and ears while you focus on your current responsibilities outside of real estate investing. Property managers will charge roughly 8-10% of monthly rents and typically include a fee to secure new tenants. You simply start with a simple google search such as “single family home property manager in City X”. From this list you start filtering based on reviews and visiting their website. Once you get a feel for the size of the organization (I would recommend mid-size organizations with at least 10 years of experience in the local area). I would select at least 3 to conduct phone screenings. Phone screenings need to be able to test the knowledge of the property manager. Ask them how many properties they manage, ask which areas (zip codes) are classified as A, B or C areas, ask about mortgage brokers, lawyers, realtors, 1031 exchange firms that they would recommend? Ask them to send you some previous deals that they have worked on with clients and ask them to comment on what made these deals successful. If you find a good property manager, they will assemble the rest of your team for you. I can't stress about the importance of securing a strong property manager. If you find a good one they will assemble most of your team below for you.
Realtor: In my experience, it’s best if the property management and realtor are independent from one another. I still get my property manager to vet any houses but having separation is still the best approach. Again, selecting the realtor is easy if you have a strong property manager. The property manager should already have a significant portfolio of homes and they will know which realtor has found the best deals for their clients and which ones haven’t. Again, they will make the introduction and as long as you outline your goals up front, the property manager can direct you to the realtor that is best suited for your defined goals.
Mortgage Broker: Again, ask your property manager. Your mortgage broker should be local to the city you are going to invest in and I don’t think they need to be a large national provider (some of them have stringent requirements and not as flexible as some smaller local brokers) They should be flexible enough to handle out of state investors and be able to handle transactions that are going under your personal name or LLC (Limited Liability Corporation). I will talk more about this in my next current projects section.
Notary/Lawyer/Insurance Agent: Your search (after consultation from your property manager) should be focused on finding someone that is able to handle document signing for out of state investors. You goal is to not fly or drive down every time you make the offer. Trust your team. You can accomplish everything without ever visiting the property. I do think it’s worthwhile to visit the city once you have chosen it as a place to invest in to get a sense of the neighborhoods but it’s not absolutely required.