Have you ever asked how to manage rental properties from out of state?
I mean, can you actually own properties in a state where you don't live, have them run
effectively, make money and not have things blow up while you're not there.
Let's find out.
In this video, I'm gonna share with you the 4 things you need to know if you're gonna
own property out of state and make sure it's managed effectively.
And just as a word of encouragement, I own hundreds of units and none of them of where I live.
I only own my primary residence in the area where I live and I'm telling you, you can
grow a portfolio where you never live if you do exactly what I tell you to do in this video.
But stick around to the end because I have a free gift for tuning in today.
I know it can be scary if you think about buying a property in a place where you don't live.
Here's why I believe everybody should own properties where they don't live.
Because if you limit the properties you buy to the city you live in, you're shutting yourself
off to most of the opportunities in the country and even the world.
I want you to start expanding your mind to owning properties in the markets that are
best for the strategy of real estate you're going into.
But, if you're going to own properties from out of state, you got to change what's upstairs
because your mind is literally the ceiling to this concept.
If you can't get past the idea that you're not driving past the property and looking
at it, you'll never be able to bust through that fear and actually get to the value of
owning properties anywhere and you still being able to sit on the beach.
The very first thing you need to do if you want to own properties out of state is you
need to hire a third party property manager.
A third party property management company is simply somebody who does all the work to
make sure the property runs well.
That means they're going to collect rent, they're gonna deal with tenants that aren't
paying on time.
When a tenant moves out, they're gonna clean the unit and they're gonna find a new tenant
to move in.
They're gonna make sure the repairs are done on time and tenants are happy because our
tenants pay our bills.
We want to make sure they're taken care of with the utmost respect and care because they're
the most valuable person in our business.
So, our property managers make sure they show love to our tenants and make sure they're
taken care of.
A third party property management company is a valuable piece to your team and I would
say you would never be able to manage properties out of state without having a really good
management company that can take care of the property when you're not there.
As a side note to hiring a third party property management company, if you have a building
that's 100 units or more, you can actually hire a full-time person, give them 1 of the
units they live in and they can manage that property full-time.
Usually, above 100 units, there's enough revenue in the property to cover a full-time person
that does nothing but focus on that asset.
But please do yourself a favor.
Never own properties out of state without hiring a property manager that's gonna do
their job so you can live free.
The 2nd thing you want to know about owning properties out of state with that property
manager is make sure you hire an entrepreneurial property manager.
There's property management companies that really think like businesses and there's property
management companies that think like property managers.
I want you to pick the entrepreneurial ones because they're gonna not only think about
the units you have, they're gonna continue to think about how to help you grow that portfolio
within town when you're not there.
I like to work with companies that are big enough to take the work load of my properties
but also small enough that really give me the customer care in which I require in order
to run properties sufficiently.
I like to look for property management companies in the 2 to 500 unit range, meaning they're
managing 2 to 500 units so they have systems already in place but they're also small enough
where I can literally text or call that owner at any time.
Entrepreneurial property managers of that size are still in the business-building mode.
So, they take care of their owners with utmost care because their owners are their lifeline.
That's their business.
So, when you pick a property management company that's at that range, they're gonna treat
you much more like a valuable asset to their company.
If you come to a company that's managing 4, 5,000 units, you may simply be 1 person in
a sea of many.
Where a smaller entrepreneurial business is gonna treat you much better and really treat
you with the care you're looking for.
Not only will they treat your properties like their own, they'll also help you acquire more properties.
My property manager manages about 2 to 400 units and she called me the other day with
an asset that one of her other units where looking to sell and wanted to know if I wanted to buy.
Se,, when you have a smaller company like that, you can build a relationship with the
owner and they often will give you leads so you can continue to grow your portfolio.
If you're 1 person in a sea of 5,000 units, the owner is probably already has people he's
pushing deals to and it's a little harder to become that first person on that speed dial.
When you communicate with your property managers regularly, you also stay top of mind.
We call that TOMA.
Top-of-mind awareness.
The reason that you want to stay top of mind is so they can continue to inject care and
love into your properties.
But the rule of thumb for me is I want to talk to my property managers once a week until
the property is stabilized and earning good revenue and then I can move it to once every
other week and then once a month.
I have 1 batch of properties that I've owned for quite a while, I might talk to my property
manager once a month if that.
Because we've brought the properties to health, we've owned the properties for a long time
and he does a really good job managing them, there's no reason for me to check in because
I know he's doing a good job.
So, I will say to you, check in with your property managers once a week to start or
maybe even more if that fits your comfort level but as you scale that property to stability
and it's making good revenue, you can scale that down and enjoy more freedom.
Make sure you stick around to the end because I have a bonus tip for owning properties out
of state that you're gonna want to know and it's a person on your team most people never
think to leverage when owning properties from out of town.
Stick to the end and you'll get it.
The 3rd thing that you want to make sure of when you're owning properties out of state
is that that property manager you're hiring has in-house contractors or really good connections
to awesome contractors that can fix your properties when they need it.
One of the key people you need on your team is contractors.
You need contractors that can fix leaky roofs, broken doors, windows that break and anything in between.
But a lot of us if we're out of town, we may not know great contractors in that city.
So, we need a connection to them.
The good news is most property management companies in the size that I mentioned are
gonna have in-house maintenance teams that you can leverage.
However, they're not going to have in-house contractors for every big project.
So, if you need a huge overhaul on a unit and you need to redo major structural work
or major roofs, they're probably gonna need to go outside their company to hire a contractor.
But the good news for you is property managers that are doing a good job, they have those
connections, they know who to call and you still don't have to worry about it.
You're still only connecting with 1 person which is that property manager and they're
connecting with everybody else you need in order to manage that property well.
A poor contractor can cost you thousands and thousands of dollars.
The first way is lost rental time.
For example, if a contractor takes longer to fix up the unit, everyday they take longer
than it should take is a day you can't rent that property out and it's costing you money.
So, what I like to do is take how much I charge a month in rent and divide that by the days
of that month and that's how much I'm losing every single day a tenant's not in that place.
And you can mitigate that as long as you have a great manager that knows those contractors
and can make a phone call to get them there quickly and to manage their process and progress
to make sure they get it done fast.
A poor contractor can also double the amount of work you needed to do when you started
because they can do work and then you actually have to redo the work.
This happened to me recently.
I had $10,000 worth of work done to a unit, it was a poor contractor and we had to hire
a new contractor to come in and fix it and it was a big mistake in hiring a poor contractor
because we had to redo all the work that they did.
So not only did I have to pay the 10,000 once, I had to pay the 10,000 twice in order to
get a tenant in there.
That's what I don't want you to have to do.
A good manager will mitigate that process and make sure that doesn't happen.
The reason this happened to us is we were testing out some new contractors in the area
and we found one we shouldn't use again.
Before we go on to the last tip and that bonus tip, make sure you subscribe to the channel
and turn on that bell notifications so you get notified every single weekday when we
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The 4th thing you want to do when you own properties out of state is work with a really
good real estate agent or broker in the same kind of assets you're buying.
If you're buying single-family homes, find a really good real estate agent that understands
how to find single-family homes that you're looking for.
If you're looking for commercial property, work with a broker that specializes in commercial property.
If you're starting to own properties out of state in a certain city, you want to own properties
there and own as many as you can there.
And the only way you're going to continue to acquire properties is if you continue to
get leads from people like real estate brokers.
So, working with a really good investor-friendly broker is huge to growing your portfolio to
that next level.
My broker and I talk nearly everyday about deals we're working on.
He's working on leasing some of our commercial space out, he's working on some deals we're
trying to acquire, he's working on some deals that we're thinking about maybe even selling.
He's working on deals all over the place.
The truth of the matter is we talk almost everyday because we're always working on either
buying a property, selling a property or leasing a property.
So, a broker is a huge person on your team that can continue your portfolio forward.
But the other powerful think about a broker is they have what we call napkin or pocket listings.
Napkin or pocket listings are listings they literally have in their pockets.
It's the idea that they have listings that aren't on the market yet.
They know of a seller that may want to sell, but nobody else knows about them.
I'm currently looking at a 72-unit building that a broker sent me, literally I'm the only
person that knows this property is for sale.
That's because I work with a really good investor-friendly broker, knows the kind of properties I'm looking
for and they can shoot those properties to me right away.
Oh and by the way, this is in a city I don't live in.
I told you if you stuck around I'd give you a bonus tip.
Well, one of the people on your team that most people don't think about is a local bank lender.
My local lender in the cities that I buy in are paramount to my success.
Not only do they loan on the properties that I'm buying, but they also know tons of other investors.
They're loaning to investors all the time.
They know who's buying properties, they know who's selling properties, they know who's
looking for more properties.
Lenders are key pieces to your team and a lot of people don't think to build a relationship
with a local lender.
Because if you're gonna buy a property at a local area, of course you're gonna want
to leverage them for that loan but remember, they have a lot more connections than just lending.
I also want to give you a free gift for tuning in today.
I want to give you our free multi-family masterclass.
If you click the link in the description, you'll be taken to my free 60-minute training
that walks you through the 5 things you need to know and do to get a piece of multi-family
in the next 71 days.
I can't wait to see you in the training.