Long-Distance Real Estate Investing: How to Buy, Rehab, and Manage Out-of-State Rental Properties

by David Greene

Live where you want, and invest anywhere it makes sense.

Real estate investing is one of the greatest vehicles to build wealth, but it doesn’t make sense in every market. Some locations provide incredible returns, while others make it almost impossible to find a single property that profits. Traditionally, investing out of state has been considered risky and unwise.

But the rules, technology, and markets have No longer are you forced to invest only in your backyard! Experienced investor and real estate agent David Greene shares his in-depth strategy to build profitable rental portfolios through buying, managing, and flipping out-of-state properties.

Grow your real estate investing business in any location.
Build relationships with your team from miles away.
Learn to recognize coming shifts in any market.
Use technology to stay informed from afar.
Apply checks and balances to ensure you find the best deals.
Understand where to buy, where to avoid, and whom to hire for work.

Don’t let your location dictate your financial freedom. Get the inside scoop to invest—and succeed—anywhere!

Genres: Business, Finance, Money, Nonfiction, Personal Finance, Buisness, Entrepreneurship

395 pages, Kindle Edition

Published December 14, 2017

About the author

David Greene is a former police officer and a real estate investor with more than nine years of experience. He has bought, rehabbed, and managed more than 35 single-family rental properties, owns shares in three large multifamily apartment complexes, and is a top-producing real estate agent on the Keller Williams East County team. A nationally recognized authority on real estate, he is the co-host of the BiggerPockets Podcast and the author of two bestselling business books. David loves basketball, Batman, being an uncle, and helping people achieve total financial independence through real estate.

Reviews

[Christopher Williams · Rating 3 out of 5]

There is good information in here about real estate investing in non-local markets. Particularly the "four core team members" idea. Great way to establish a presence & make the investing work for you.

I give this 3.5 stars because the book is far, FAR too wordy. You could cut half the words and it wouldn't lose any value.

This may be a minor point to some. But with all the reading I like to do, I don't like my time wasted by wordiness. I offer this as a suggestion for a second edition, edited down so we have only the genuinely-useful information.

[Corey Schneider · Rating 4 out of 5]

1. Intro

2. The Power of the Internet
a. Tools: Walkscore
b. Rentometer.com
c. Look on county website for permit/repair history
3. Rules and Regulations
a. Price/rent ratio lead to cash flow, so South and Midwest are best for this
i. 1% rule
ii. 70% rule (Buy at 70% of after Flip ARV)
iii. 2% rule could be bad (why are they selling so low?)
iv. 50% rule (maintenance)
b. Relationships = deals
4. First Team Members
a. Deal finder = agent/wholesaler
i. Bonus if agents run a team
ii. Ensure they deal w/ investors/own property
iii. Ensure agent has a plan on how to find investor deals
iv. Mutual trust/respect = mutual success
b. Lender – they look at:
i. DTI: Debt to income ratio. Lower = better
ii. LTV = Loan/home value or 1 minus down payment
1. Having total portfolio LTV < 70% = good
iii. Credit Score – anything 720+ = good
iv. After you have 10 mortgages, bank can’t package/sell your loan, making it harder to get conventional financing
1. >10 loans, need a portfolio lender where loans go on the bank’s books
2. Credit unions = more flexible/influenceable
c. Taxes/reporting rental income
i. There’s debate about paying higher taxes/reporting more profit to get better loans later vs opposite
1. David votes to report profit, pay taxes, get better long-term deals/rates, is better than lower taxes/more cash flow
5. Ch 5 – The Rest of your team
a. Use bigger pockets to find prop mgr, agent, other investors
b. Use agent/pm/lender to find contractor
c. Make sure you hold peeps accountable
d. Prop Mgr is big time if good
6. Understanding Your Market
a. High area demand = high home value = higher rent
b. Agent can run comparative mkt analysis (CMA)
c. As equity increases, LTV decreases, can refi to use equity on another loan (HELOC)
7. Working with the market
a. ROE = annual cash flow/equity
b. Headache factor = how much mental capacity will it take to buy house. What’s opportunity cost you’re losing with this – what else could you be pursuing?
c. Great tenant/modest cash flow > bad tenant/great cash flow
d. Set leases to expire in summer, so lower moves = higher rent price
e. 1031 exchange/tax deferral
8. Managing Out of state properties
a. Incentivize contractor to succeed (< time = higher pay)
b. You should buy materials yourself so you’re aware of costs and give to contractor
c. Don’t ‘give full pay up front
9. Finding Materials
a. Styles/prefs of community you’re in = important
i. Use Pinterest/Tumblr/houzz to explore
b. Poll peeps on social media for feedback
c. See p. 227 for value-added things/requirements vs “nice to have”
d. “hack” your contractor by asking their input/strengths to add most value to home
e. Easiest ways to add value:
i. Paint
ii. Flooring (especially in small areas like bathrooms)
iii. Shower (tile = nice) + rainfall shower head
iv. Cabinets + fresh paint
1. Fixtures to match appliance color
v. Countertops (Granite)
vi. Extra bedrooms
f. 4 factors to determine value:
i. Location
ii. Sq ft
iii. Bedroom #
iv. Is it upgraded?
g. Adding bedrooms = worth it only if it adds value
i. P. 240 for potential places to add
10. Maximize ROI
a. Big lot = big opportunity, as they allow for:
i. Addl detached units
b. Knock down walls to create more space? Make sure they’re not load-bearing
c. Add bedroom: living room or dining room are best conversion candidates
d. Bad house in nice area = great
i. Take advantage of mkt/property/owner distress
1. Signs = “cash only”, “needs work” or “investor friendly”
11. Find more deals out of state
a. Best finds:
i. REO = real estate owned = foreclosure  homepath.com
ii. Short seller = sale price < mortgage  frustrating process
iii. NOD = notice of default = pre-foreclosure
iv. Half-finished project = risky
1. Probs won’t qualify for traditional lending b/c not livable
2. Make sure you get an inspection
v. Have agents tell their team to bring offers to you and pay agent $1k if you close on property they shared.

[Ali E9 · Rating 3 out of 5]

It's a really good book in its genre. I enjoyed hearing strategies but it doesn't have so many things on Long Distance Investing as the title promises.

[Jason Laso · Rating 4 out of 5]

I can attest that this book did give me the confidence that I too could start investing out of state (and have done so successfully twice since reading this book). The biggest takeaway I got from this book was that technology makes the world smaller. There's nothing I can't do from my computer/phone for a house in another state that I wouldn't do for a house next door. You can learn about new markets, look at listings, and find team members with roots on the ground (realtors, property managers, subcontractors).

That said, I read this book in 2018, before David Greene became the host of the BP Podcast and had far more of an expanded online presence. I mention this only because so much of the book's content that I found novel at that time can be found for free online now. I also would opine that this book tends to follow up a template of, "Here's the main bullet points, now rah rah you can do this too!" It tends not to get too granular. I absolutely think everybody interested in this topic should seriously consider long distance real estate investing, but I just don't know if you actually need to read this entire book anymore. Just listen to any of the hundreds of podcasts Greene has done or read some of his blog posts to get the gist of this book.

[Chris · Rating 4 out of 5]

Great first look into REI from afar. Not very useful for intermediate-expert level folks but everyone may find a nugget of wisdom inside. The author's thesis is that the difference between renos near and far are basically the same especially with the advent of technology shortening the distance.

I found the author's opinion to be heavily skewed towards distance not mattering - surprise - but there are plenty of others in the biz who would argue furiously against his techniques. A lot of this stuff relies on trust and guessing games, and since you can't actually drive by and monitor progress of a project, you're ultimately at the mercy of whoever you subcontract to.

That being said, he does make a good case for long distance. If you live in a market that's unapproachable, there is significant value in looking 2 towns (or even 50 towns) over. For whatever reason you chose, it's worth the 10 dollars for a potential nugget that could make or break your risky deal.

[Italo De Nubila · Rating 4 out of 5]

Would love to see an update on this after COVID

[Neil · Rating 4 out of 5]

Practical but a bit wordy and repetitive sometimes. Overall content is very helpful, though, especially on terms with contractors, thinking about prioritizing value over worrying about budgets, and looking for opportunities to add bedrooms and bathrooms. A great complement to the podcast.

[Stéphanie Blouin · Rating 3 out of 5]

I dont know what it was but I wasn’t that much into the book, maybe it’s because I have read lots of real estate book in the past months. I still learnt some strategies that will allow me to invest long distance. A lot of networking and getting referrals. The number one thing is having a team that is on the ground.

[Casey]

Jim gave up!

[Shawny Le · Rating 5 out of 5]

This book was terrific in providing both a roadmap to get started in out of state real estate investing and also helping you build up the courage to do it!

[Cagefighter18 · Rating 4 out of 5]

This had some great strategies for long distance real estate investing. Not quite as organized into processes as Greene’s more recent books though.

[Nayef Kazzaz · Rating 3 out of 5]

A good book. Needs more focused details.

It is a good book, likely one of the best and most comprehensive in its category. However it relies too much on advertising for biggerpockets site and seems this is the main purpose of the book. Another issue, it would seem that there is some inconsistency about the definition of acceptable risk and using financing. Mostly he encourages buying safe low maintenance houses then talks minimally about maintenance then encourages buying run down houses. I think his strategy changed based on his financial status over the years starting with run down houses that are super cheap them moved up the ladder to lower maintenance houses. Also moved from fully finanaced to buying in cash. However that is not clear in the book. If he rearranges the books somehow then that would be better and less confusing.

[Public Speaker · Rating 4 out of 5]

This book will have more value to you depending on how far along you are in your journey. Real Estate is very area specific. The ugly truth is your favorite strategy you are reading about online may not be successful in your area. In the past you just had to get with the program and do what everyone else was doing. Now due to advances in technology and the internet it is possible to invest in other states where that favorite strategy of yours is gospel. You are no longer limited by geography.

It is a very interesting read.

[Madhuri · Rating 4 out of 5]

Some great tips but the book is thicker than it needs to be. The author repeats himself quite a bit in the latter half. Some suggestions that come in towards the end of the book seem really important and the placement of it is almost like a reward for reading all the way.

[Kimberly Smith · Rating 4 out of 5]

As an investor in property that is over 2,000 miles away from my home, this book was very helpful in thinking through all members of my team and how to create a partnership that worked for all of us. I appreciate the how-to and considerations called out in this book. It did not earn 5 stars however because, as with other BiggerPockets publications, the editing isn't stellar and there are spelling errors and typos in the book that made it feel a little less professional. I also believe if you spend a few hours listening to the awesome BiggerPockets podcasts that are co-hosted by David Greene you can get a lot of this info. Nevertheless, it's a great book for someone who is new to the game, or has only invested locally and managed their own properties. Out of state investing is a whole different ball game!

[Jackson · Rating 5 out of 5]

My fourth real estate book I've read recently. Though the title of the book goes as it does, what I realized is that this book wasn't entirely different from the other real estate guides that focus on investing closer to your physical location, it's just that you simply rely more on technology and your phone to do exactly the same thing. It looks like long distance requires a bit more research up front primarily regarding quality of location since you haven't likely experienced the place yourself of course. There's some great tips in here and while it's not a how-to manual, it certainly builds upon the foundation of real estate knowledge you may already have to be able to shift mental gears into how to do this stuff solely in the virtual realm. Recommend for anyone interested in real estate.

[Ryan Bibledingers · Rating 3 out of 5]

There was good information but I’m a little disappointed. Just about everything in the book is basic rental property investing and not specific to long distance investing. I recommend Brandon Turner’s Book on Rental Property Investing for most of the same information but a little clearer and more comprehensive. Like other reviewers have stated, I bought this book expecting to learn how to analyze markets and pick a city to invest in. I think the main premise, though, is that if you have a good team of people that bring you great deals, you can invest just about anywhere. The main takeaway is to network within REI communities to find a great team to work with. An important takeaway, but not the takeaway I was expecting.

[Rolin · Rating 5 out of 5]

Being a total novice in real estate investing and having read no other real estate books which would have facilitated in creating a benchmark inorder for effective comparison and appraisal of the book. I have to agree that I have actually found practical value in this book.

The book is written in a simple and easy to follow structure enabling the reader to enjoy as well as benefit from the book. I loved a lot of ideas the author has familiarized me with especially in the areas of picking teammates and effectively organizing them in order to get them to their full potential. Basically show them how they would benefit from putting money in your pocket.

The book opened me up to a complete new area of investing and I agree I am kind of excited.

[Morganjason · Rating 5 out of 5]

Affordable housing in New York often requires extra research and dedication. Identifying neighborhoods with promising opportunities and staying updated on new listings is essential. Platforms like https://new-york.realestate/ specialize in providing information on affordable housing options, offering a range of listings and expert advice to guide your search. By leveraging such resources, you can discover hidden gems that meet both your budget and expectations. Navigating the affordable housing market becomes much simpler with the right guidance and tools.

[Ligaya · Rating 3 out of 5]

This is a decent book for newer real estate investors but if you have some experience, it is just common sense. The author spends a lot of space telling us what he will be telling us later on in the book... ugh! A more expert editor should have tightened this book up by 25%. As someone who does own and manage out-of-state rental properties and has for over 25 years, there is not nearly enough discussion on the things that can go wrong, which is PLENTY. So, there is not enough attention paid on the pros and cons and I would still never buy without going to see it for myself.

[Janani Kalpathi · Rating 5 out of 5]

Go-to book if you want to get started with the R of Real Estate!

Brilliantly written by David and the Bible for out of state real estate investing.

If you are as interested as me on real estate investing, flipping and rehabbing, this is THE book to read and retain. I've probably highlighted all the lines of this book as it's just too good!

This will be my reference book for a long time and a hard copy purchase to include this in my library is on the way!

[Miguel Mariano · Rating 3 out of 5]

I skimmed the book because I’m more specifically interested in STRs and not long term tenants. It was most useful in building the team and picking the right partners.
There are quite a bit of analogies that feel like filler and build up before getting to the point, so in that sense this book is pretty fluffy. I find more value in the numerous BiggerPockets podcast that David is often a speaker on.

[Andrew · Rating 3 out of 5]

Some good tips for how to work with and motivate contractors, agents, and property managers, as well as how to evaluate properties remotely with video and good questions. Most of the book isn’t unique to long distance investing though - would apply to any real estate ventures. I appreciated the casual tone overall, but there was a lot of repetition and wordiness, so some more editing would have helped.

[Ryan Cox · Rating 4 out of 5]

My only major complaint was that sometimes the chapters were a little longer than I prefer and the pages seemed to have a lot of words. Kind of silly, I know. But overall this book was great at expanding my confidence at the idea of buying out of state. It is something I wanted to learn more about but not something I had seriously considered. David Greene is great and he will walk you through the process from start to finish.

[Thomas Port · Rating 3 out of 5]

OK read, nothing groundbreaking, there are a few little tidbits of information that I gleaned from reading the book, it could have done with being 50 pages shorter, getting to the final page was a bit of struggle.

With that said, someone that is totally new to real estate investing should probably give this a read before embarking on any out of state investments.

[Anbu Manoharan · Rating 4 out of 5]

This book was a tad repetitive for me, but I learnt a lot of useful information. I learnt enough to understand real estate investing is not always successful and how to make sure it does not become a lossy enterprise. I will definitely re-read some parts of the book if I ever consider real estate investing seriously though.

[Michael Gray · Rating 3 out of 5]

Solid 3.5. A bit disorganized and long but lots of really smart tips and the thoroughness is appreciated. I understand the author is a real estate investor and not a writer, so I appreciate the effort and I think he did a great job overall. I learned a ton. I think a second pass at this focused on how to organize the book would go a long way.

[Yose Dominguez · Rating 5 out of 5]

This a great read for those of you in the Real Estate investment path. I have learned so much from this book that I will actually be acquiring a physical copy of the book. It will be easier for me to refer to every now and then. Ebook show me how valuable this is. Financing with no cash, flipping, looking for a property manager, cash flow. It is all included.

[Angel Carlos · Rating 5 out of 5]

Great book

Great book to read when trying to find a way to invest out of states as a newbie I’m still trying to find my first house in General and after reading this book I’m might still rent California well I build my wealth out of state one property at a time

[Ashley Hiney · Rating 5 out of 5]

Easy read. Straight forward and actionable plan.

When purchasing this book, I was looking for something that would lay down a solid foundation for a beginning investor like myself to follow. I feel that this book hit and exceeded that mark.