My advice to anyone considering investing in real estate in ONLY do it where you live! Then you can keep an eye on things and avoid many of the problems of investing in a different state. When you invest out of state, you often don't know there's a serious problem until it is too late and even then, it is hard for you to take a month or two off to go try to fix it.
There's not a week that goes by that I don't get a phone call or email from an investor who bought real estate in a different state and is now in a big fat, expensive mess.
A California investor bought 10 rentals in Texas from one of those companies who will provide the house, the fix up, the tenant and property management. Everything is turn key and easy right? Wrong! The CA investor has a $2000 a month negative cashflow
Another guy bought in upstate New York and quickly lost his life savings of $60,000. Managing property mangers who are supposed to be managing tenants is hard to do from 2,000 miles away.
A guy in NY bought houses in Kansas City because they were so cheap compared to where he is. He lost more than $1,000,000 in cash and ruined his credit.
See the email I just got today:
I have a house I have owned for 1.5 yrs (in Virginia and yes, I live in CA) with a loan of 295K and $2,286 PITI which I have had no revenue on for over a year and I did the ultimate combination of no-no's on which has been reeking havoc on my wife and I and now is to the point I can not afford to make the payments after another month.
I financed in our name and left the previous owner on title and she was paying rent to me. I had to evict the previous owner for non-payment then do repairs, and now have to get court approval on any sale terms. The lawyers are slow. Each time I have had a buyer it has fallen through for some reason. The last being that it took too long for court approval and the buyer backed out.
The previous owner, who is on title, will not Quit Claim her interest in the property.
I have an offer on the table at 320K but I would have to come to the table with 18K which I really don't have at this point. We have about 23K in the bank left but the house has sucked up the rest. I consider seller finance but don't know if I can get what I'd need to cover like N=360, I/YR= 7.75, PV=335K, PMT $2,400 (PITI and management), FV=0.
There's not a week that goes by that I don't get a phone call or email from an investor who bought real estate in a different state and is now in a big fat, expensive mess.
A California investor bought 10 rentals in Texas from one of those companies who will provide the house, the fix up, the tenant and property management. Everything is turn key and easy right? Wrong! The CA investor has a $2000 a month negative cashflow
Another guy bought in upstate New York and quickly lost his life savings of $60,000. Managing property mangers who are supposed to be managing tenants is hard to do from 2,000 miles away.
A guy in NY bought houses in Kansas City because they were so cheap compared to where he is. He lost more than $1,000,000 in cash and ruined his credit.
See the email I just got today:
I have a house I have owned for 1.5 yrs (in Virginia and yes, I live in CA) with a loan of 295K and $2,286 PITI which I have had no revenue on for over a year and I did the ultimate combination of no-no's on which has been reeking havoc on my wife and I and now is to the point I can not afford to make the payments after another month.
I financed in our name and left the previous owner on title and she was paying rent to me. I had to evict the previous owner for non-payment then do repairs, and now have to get court approval on any sale terms. The lawyers are slow. Each time I have had a buyer it has fallen through for some reason. The last being that it took too long for court approval and the buyer backed out.
The previous owner, who is on title, will not Quit Claim her interest in the property.
I have an offer on the table at 320K but I would have to come to the table with 18K which I really don't have at this point. We have about 23K in the bank left but the house has sucked up the rest. I consider seller finance but don't know if I can get what I'd need to cover like N=360, I/YR= 7.75, PV=335K, PMT $2,400 (PITI and management), FV=0.
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