The Secret to a Successful Remote REI Biz

So, as a real estate investor, have you thought about investing in markets outside of your state or region?

Some investors think remote investing sounds like a truly horrifying prospect. Between the perceived risk, expense and fear of the unknown, it’s true that this type of investing isn’t for everyone.

But, for many of us, this can be a lucrative, game-changing opportunity to grow our businesses. And the success of your remote investing business all comes down to 1 single factor…

There’s nothing mind-blowing about this, but it’s so crucial that I want to talk more in-depth about it.

And here it is…the not-so-secret secret to building a profitable remote investing business is:

Having a reliable team on the ground.

Let me repeat: You NEED a reliable team on the ground.

If you rush through the step of building a team of trustworthy and experienced professionals (real estate agent, property manager, inspector, general contractor, etc.), you WILL set yourself up for failure.

In the end, remote investing really isn’t a high-risk venture—if you do your research and build a successful team in your chosen market.

So, let’s take a look at the prep work you’ll need to tackle if you’re serious about making this a profitable aspect of your REI biz…

Hit the Books

Your first step in this process (even before building your dream team) is to research, research and research some more. And then, after that, you need to research again.

Am I coming through clearly?

You can never be too informed when it comes to learning about markets that are out of your immediate area or state.

In fact, this is important even when you invest in your own area. Just because you are physically in a city, county or state, doesn’t mean your financial risk is less when you take on an investment property. Your knowledge, skills and team members are the factors that determine whether or not you’ll succeed.

And the good news is: We live in the wonderful age of the internet, folks!

You can find out a ton about a specific city, town, community or neighborhood with a few in-depth internet searches. Gather information about the obvious factors for the area:

Regardless of whether you’re buying a property in your own town or across the country, you’ll probably find the most valuable information online—which is awesome news if you’re interested in investing remotely.

Check out online resources such as:

You’ll need to be as thorough as possible with your research. Find out the particular neighborhood’s crime stats and rental rates (if you plan to rent the property) and the property’s tax info.

Another beneficial site to check out is Rentometer, which will give you rent estimates on nearby properties, so you can get a better idea of the monthly income you can expect if you decide to rent it.

Keep detailed notes of all your research; even if you don’t make an offer on the property (or make one but it’s turned down), the information could be valuable when looking at other properties in that area.

No matter where you’re investing—your backyard or 1,000 miles away—if you are informed, you can move forward feeling confident.

Another crucial factor for feeling confident?

That on-site team I mentioned before. Let’s take a look at a few of the key players…

Proficient Property Manager

If you plan on taking in rental income, you cannot invest remotely without a highly reliable property manager who is physically located in your remote market of choice.

An awesome property manager (or property management company) will be your eyes and ears at your property. They will help keep the tenants happy and your investment property in good shape.

This is one person on your team who you probably want to meet in person. Make a trip to your remote market of choice and interview several property managers until you find the right one. You’ll know the good ones by how nicely kept their managed properties look, their client retention and how well they vet their subcontractors.

In the end, you need someone you can trust wholeheartedly. It’s nice to be able to look that person in the eyes, at least once.

Now, you may be thinking, “I don’t know, is it really worth the money to hire a property manager? Isn’t that going to cut into my profit a ton?”

To that I say: Most property managers will charge you 6%-12% of your monthly rental income. But, my friends, your time is extremely valuable—and this service, if you can afford it, will save you so much time.

You can say goodbye to:

Save your time for more important, impactful tasks like finding new properties and sealing new deals. Leave the property management to the professionals.

In fact, you might even save money—in the long run—if your property manager is able to avoid any of the legal fees, property vacancies and property damage that you might have experienced handling everything solo.

Reliable Real Estate Agent

If you’re not going to form a strong, solid working relationship with an agent in your targeted remote market, you may as well scrap this idea right now. Truth.

An experienced and capable agent who you can rely on is an essential member of your team.

An agent will not only help you find properties of interest, but they can also physically walk those properties for you.

So, how do you find an exceptional agent?

Well, if you have a property manager nailed down already, ask them for their recommendations of the best agents in their area. They’re probably going to have several they work with regularly and will know which ones to recommend.

Once you have a couple of options, make sure you interview those agents carefully (over the phone). Take super-super-thorough notes about their experience, the types of properties they typically buy/sell and the neighborhoods they are most active in.

Remember: The agent you choose will be your representative in any purchase transaction. Make sure you choose someone who aligns well with your goals and understands your preferences!

If you choose an agent before settling on a property manager, you can also ask your agent for property management recommendations in their area. Chances are they’ve worked with one (or several) before.

Champion Contractor

This one is pretty straightforward, so I won’t spend too much time on it: If you’ve selected a property management company, they typically will have contractors and subcontractors of choice. So, really, the work is done for you.

If you prefer to find your own general contractor, obviously you want to interview your candidates before making a final decision…

It’s always helpful to browse their reviews online, too. Make sure you choose someone who will do high-quality work for reasonable prices. Sometimes, it’s worth a little extra money to pay someone who you know will do the job right the first time.

Now, aside from a GC, you’ll also need some skilled specialists—located in your remote market—who you can rely on (plumbers, electricians, HVAC professionals, roofers, foundation repair experts, etc.). So take some time to research these as well.

Again, your property manager will probably have each of these professionals on speed dial, so they can make excellent recommendations.

Ready to Rock

Have you invested remotely? Let me know your experience in the comments section below. If you haven’t ventured into this opportunity yet, what else would you like to learn about successful remote investing?

Ingenious Inspector

Another person you need to be able to trust completely is your inspector. After all, they are the best source of firsthand information regarding your property. You can’t be there to inspect everything; but they can.

If you’re buying older homes, especially (but really, this can apply to any property), make sure you understand zoning codes in your remote market, and figure out which of the home’s past repairs/upgrades were permitted. Know which aspects of the property will need to be brought up to code.

Choose an inspector who will take their time and do an awesome job. If they are in and out of the house in 30 minutes, that’s not a good sign. Find someone who is willing to explore every single nook and cranny. You want the guy or gal who crawls into every crawlspace, ventures into the attic in 100+ degree temps, tests the outlets and lights, and examines each door and window.

In the end, you need an inspector who can give you a crystal-clear depiction of the property—someone who is very familiar with how investors like to flip homes is also a bonus.

Other Dream Team Pros

As your remote business grows, you’ll probably be adding paid team members, such as:

The Bright Side

When you think about it, remote investing really isn’t any more risky than investing in properties in your own area. In either case, if you do your research and have an amazing team in place, you’ll mitigate most of your risk.

One benefit of remote investing is that it helps you diversify your portfolio…

If you have properties in 3 different areas of the nation, for instance, you’ll be less likely to suffer financially if one of those markets starts to decline—because you have the other 2 to fall back on.

Even if the real estate market where you live is a thriving one, the opportunities you find there might not align exactly with your long-term goals. By selecting a remote market, you can choose an area that fits perfectly with your timeline, budget, property preferences and needs.