Investing In New Markets
Visit. Search. Act.
Have you thought about real estate investing in an area other than where you live? The upside of investing in your home market is that you know people there - you have a trusted network of advisors, lenders, contractors, and property managers. But at some point you may decide to invest in a vacation rental that you can use on weekends and rent it out the rest of the time. And what better place to invest in real estate than Bend, Oregon?
It can be daunting to know where to start and how to invest in a new market. Your first task is to establish your team. And the most important person on that team is your realtor. That’s because your realtor is the cornerstone of your investment strategy - the connector between you and all the other folks yo'u’ll need on your team so that you can feel confident about investing in your new target market.
Easier said than done. How do you find a knowledgeable realtor who understands investment properties? So many just focus on the typical home buyer and don’t know how to analyze potential real estate deals for profitability and cash flow. It takes time and experience to gather the tools and resources to become a real estate investment expert, and that’s precisely what we’ve done at Central Oregon Investor Network.
We are a team of experienced real estate investors ourselves with multiple investment properties in Portland and Bend, Oregon (and Mexico!). And we come with the legit credentials you’re looking for in trusted real estate investment advisors: Suzanne is as a licensed Oregon Realtor and William is a licensed and bonded Oregon Contractor.
So, now that you’ve got a few experts on your team, what’s next?
Visit your target market. Go for a weekend at a minimum to get a feel for the place. Drive around different neighborhoods. If you’re looking to invest in a short-term rental, stay in a local AirBnB that appeals to you and start to notice the details. Check out wiserei.com to get some stats on different markets to target.
Identify neighborhoods you’re interested in. Then do your homework about those neighborhoods. Your experienced investment realtor should be able to provide insight into areas where short-term rentals are allowed, and where there are local restrictions to consider.
Set your goals. A good investment realtor can help you with goal-identification and providing the tools for analysis so you know a good deal when you see one.
Get pre-qualified, ideally with a local mortgage broker. Going local gives you an advantage because it’s likely that the seller’s agent has worked with that lender and knows s/he can get the deal done, even if it’s a bit tricky. It can make your offer stronger and more competitive than someone using a national lender.
Start searching. Set up a search on your favorite real estate app, and expect your realtor to have her eyes out for you too. Just because you have an app doesn’t mean you have to find all the good deals on your own.
Analyze potential deals. Start using your investment analysis tools so you feel comfortable with the numbers. Play around with different scenarios - buy and hold, buy and flip, live-in flip, BRRR, vacation rental.
Offer. And offer again. And again. How much does it cost to put in an offer? Zero. Nada. Nothing. So make some offers and see what happens. By now you’ll know what a good deal looks like and the more times you offer, the better your odds of getting the deal you want - the deal that aligns with your goals and intended scenario.
Due diligene. Once you’ve got an accepted offer that meets your '‘good deal’ criteria, it’s time to get in gear. Work with your contractor to get a fix-up estimate that you can plug into your numbers. Do your due diligence by searching county records, actually reading the preliminary title report and seller disclosures. This is your responsibility, so don’t expect someone else to do it for you and tell you what it says. Ask questions and re-run your numbers so you feel confident in your decision.
Close and begin transforming your investment property into a space that will attract great tenants or guests. Check out the article on designing and furnishing your AirBnB for some tips and ideas to get started.
Rinse and repeat. Now that you’ve done it once, you know the steps for investing in markets other than where you live. It’s always easier the second time, so keep your search going and be ready to act when that next ‘good deal’ comes along!