Oh, long distance relationships. Many of us have been there – the long phone calls, the infrequent time together, the uncertainty… Let’s face it: they stink!
But what about “long distance relationships” in real estate, i.e. long distance investing?
Who would ever consider buying an expensive piece of property across state lines (or across the country) without ever stepping foot inside?
Aren’t long term real estate investments doomed to fail like those long term relationship we’ve all attempted at some point? A decade or two ago the answer was almost certainly yes. But with numerous technological tools now available and techniques for building local teams, we no longer need to restrict investing to just our home market.
Limiting investments to only your own backyard can greatly decrease access to solid deals. The modern real estate investor can seek out new markets to find incredible deals, especially if you are living in an expensive city on the coasts like Seattle, Boston, NYC or San Fran.
Boston: where the founders invested first and realized we could get more for our money elsewhere
The founders at Akras began began their real estate investing careers in Boston where they were living and working. As one of the hottest US markets, their properties generated cash flow and appreciated substantially. However, they were incredibly expensive to buy, and tied up funds that couldn’t easily be reinvested.
With these challenges, Akras explored other markets where they could get more units and cash flow for less capital. They settled on Spokane, Washington, an inland growth city boasting way more affordable prices. In Spokane, you can buy a 5 unit building for less than $350K, generating more income for less money invested. Read our article about Spokane HERE.
The price they paid for 1 apartment unit in this building in Boston buys 10-15 units in Spokane that generate far more revenue
So the Economics Make Sense, But How Can You Invest 3,000 Miles Away From Home?
Well, the game has changed. With a few simple, free tech-based tools and a strong on-the-ground team of professionals, you can easily analyze, buy and manage investment properties from afar. This type of investing is becoming more commonplace and those that don’t consider it viable are frankly behind the times. Regardless of where you invest, getting to know the market intimately and having the resources to conduct due diligence is necessary.
Here are the top tools and teams that provide you with the necessary knowledge and skills to long distance invest:
Using these tools and a solid local team, we recently closed on a 5-Unit multi-family and are in the process of rehabbing and stabilizing it. We bought the deal off-market and our founding team never physically set foot in the property! Read more about this deal here.
It’s possible to utilize these tools, teams and processes in any real estate market, allowing your business to scale quickly and efficiently.
If you’d like to learn more, check out a great book about long distance strategy written by a highly experienced and successful investor-turned-author, David Greene, “Long Distance Real Estate Investing”.
Are you interested in long term real estate investing or want to learn more? We are always looking for investment partners. Connect with the team at Akras Capital. We’ll point you in the right direction, or show you how we can easily partner up on a future deal.