By Mike Baird
If you look at the market for flip houses all over the country, it’s hard to ignore some of the amazing deals you can get on properties in places like Washington, Texas, Pennsylvania, and Florida. It’s especially hard to ignore those markets if your own hometown market is looking a little bit dry.
So, one day you decide to take a look at the MLS in a lucrative market across the country. You find what looks like an amazing deal… Do you take it? Well, that depends on your style of real estate investment and how comfortable you are delegating responsibility.
Fix and Flip or Fix and Hold?
First of all, a lot of investors choose out-of-town properties for their fix and hold investments. They select deals on properties in beach towns, mountain getaways, and other excellent vacation destinations. Or they choose properties in areas with lots of people renting homes instead of buying. Either way, they can get a great ROI if they choose the right property management company to take care of finding tenants and taking care of maintenance and repairs.
With a fix and hold property like that, you wouldn’t have much (if any) interaction with the property after its rehab even if it were right next door to you. Your property management firm takes care of all of that for you, so why not invest in a house or other residential property in a great rental market across the country?
Of course, there’s still the “fix” part of the equation. If you have connections with contractors and realtors in the market where you want to fix and flip (or fix and hold) properties, you’re in good shape to move forward. You may want to be there in person for some of the rehab, but if you have a good rehab and real estate team, that’s probably not necessary, either.
Basically, if you’re comfortable delegating everything but researching the area, finding leads, and making purchases to your team, there’s no reason that you shouldn’t flip houses anywhere in the country where you can find a good market. That said, there are a few reasons that some investors might want to keep it local.
The Advantages of Staying Local
For example, how comfortable are you about researching neighborhoods in another city and another state? Do you think you can get a really good feel for the market without physically going there and spending time getting to know the area? While that kind of field research can make for a fun business trip, it’s not always efficient.
If you have decent flips in your area, where you’re an expert on the different neighborhoods and can get around them blindfolded, why look at other markets? If you don’t already have connections in those markets, you might find yourself feeling like you’ve had to start all over, building your reputation, and networking to find the best contractors, realtors, etc.
Plus, I don’t know about you, but I like to be able to drive by and check on my flip houses, and I like to be involved with the process. That said, if I find a great deal on a hands-free real estate investment in another state that allows me to continue my hands-on work at home…you bet I’ll take it! That’s why deciding on keeping your business local or expanding to other areas can be a difficult choice. You may find that it’s better to stick to what you know, but you may also find that building teams all over the country is a great way to grow your business.