How To Invest In Real Estate Out Of State


Welcome to the game of real estate. My
name is Kris Krohn and today, I want to teach you how to crush it and be boss in
this industry. We got to start with right now whether you’re going to be investing in
real estate in your backyard or whether you actually want to invest out of state.
Both can be really dangerous especially out of state and so today, what I’m going
to do is I’m going to share with you my 3 secrets that have allowed me to do
thousands of homes out of state. I’ll never be investing in my backyard ever
again. So when I got going in the game a real
estate, it all happened in my backyard. I bought my first house within the same
city where I lived. I lived in that house and then I rented
out my basement and basically the basement covered the mortgage so I was
living for free. Right that made sense for my own first house. Then a year later,
I’ve used the equity to buy my second house and then I did that again to buy a
third and then a fourth and 25 homes later, all within maybe a 30 minute
radius of where I lived, I was making about $12,000 a month. So,
I’m going to tell you right now that I love backyard investing as long as you have
the right strategy because there are fantastic strategies and there are not
so fantastic strategies. I’m going to share with you what I do to make backyard
investing the most profitable it can be. But really today I want to focus on out
of state and how you actually do that correctly. For me to share with you my
3 best tips on how to invest successfully out of state, we got to
start with this first one. Riches are in the what? They’re actually
in the niches. So, you got to ask yourself what’s your system? What’s your approach?
What’s your niche? If you want to invest in real estate that is out of state, you
need something duplicatable, something you can do over and over again and so
for me my perfect niche is I do what’s called a high ROI rental. ROI stands for
“Return on Investment’. So, it’s a high return on investment, rental property. And
my specific niche is at least a 3-bedroom, 2 bath. It is under the median,
which means it’s going to be under 220,000 nationwide and underneath the median for
that area, unusually a 100,000 120,000 maybe $150,000 on acquisition and it’s always single-family real
estate that I’m going to be running out. Now, we could have a conversation about, “Well
Kris, why not multifamily or why not commercial projects?” I’m just sharing
with you where I’ve done 4,000 homes nearly a billion dollars. It’s in
this niche right here. 3 three-bedroom, two-bath under the median,
single-family home and that’s because I know how to crank out out-of-state.
Basically right around a 25% plus annual ROI. Here’s what that means. if I put a
dollar in, then by the end of the year, it should be worth a dollar and a quarter
or 2 years later, a dollar fifty. 4 years later, $2. 25%,
25, 25 ,25, 25 that’s 100%. So basically, my aim is to double my
money every 4 to 5 years in real estate which basically I’ve been doing
for the last 15 years. The second thing that you need to understand about how to
state real estate is the scariest part about it is that you find a perfect deal,
you’re excited about it, everything’s lined up but there’s a problem.
Property manager don’t care about you. You don’t know any handyman out there.
Look at the realities of this problem. You own property that for you to get to
you have to get in your car and maybe drive 20 hours or you have to fly and
all the sudden, it’s like if I have to go out there just once, it’s going to be like a
$600 plane ticket and I have to solve this thing or I have to trust somebody
in that marketplace. So number 2 is how you really win is by playing volume. So,
volume essentially means when you’re doing a lot of deals, that’s when you
really crush it. And by the way, you don’t have to do a lot of deals, you got to be
a part of a group that is doing a lot of deals. I’m going to tell you how you can
actually become a part of my group if you’re interested. I’m buying homes every
single day of the year, literally. And it is all based on volume because in volume
here’s what happens. A property manager normally charges what? They normally
charge 10%. Why do I have some of my property managers only charging 6%?
Because I give them so many homes to manage or have you ever been ripped off
by the handyman? They kind of squeak some things and charges more money or as late
and doesn’t show up at the job when they’re supposed to and it’s kind of a
nightmare. When you’re giving them job after job, after job, after job and you’re
buying the same tile and the same materials and the same carpet, guess what
happens to cost, they drop substantially. And so, I might be 6% on my property
management and all of a sudden my rehab drops down to what’s super reasonable
and duplicatable and works. So niches, volume. Number 3, don’t just pick any
random market. You actually need to go into the best markets and here’s what I
mean by that. In the United States alone, there are 324 major metropolitan areas
and you know what? They’re not all created equal.
They can be ranked according to your niche and they can also be ranked
according to their appreciation. They can be ranked according to the cost of
living. You can basically find the most ideal market out there that can win over
and over and over again. I’ve been doing this now for over a
decade out of state and I’m going to tell you right now part, of the reason why I
get this 25% plus ROI because half that ROI, comes from moving into the best
markets. Now, right now if you talk to remember my team, will share with you
what our markets are. We’re going to share with you how we’re crushing it and
how you can get in on the action. But what I want you to understand are a
couple of key concepts. The first one is you’re looking for an area that has a
low purchase price. Your sweet spot is generally between 80,000 and a 180,000
which is still 20 to $50,000 dollars below the median. Number
two is I like markets that have a low cost of living. Write that down. Low cost
of living means that it’s cheap to live there but also that has a higher
earnings per capita. Which means that in that area, people make a lot of money but
it doesn’t cost a lot to live there. What it means is there’s that when they get
in the home, they could afford twice as much home perhaps.
Which means repairs goes down, basically everything goes down and you send up
saving a lot of money. So niches, volume, best market, this is the key for you to
go out of state. Now if you’re still thinking, “Well Kris, what if I want to
invest in my backyard?” Don’t do rentals then. If you want to pick up 25% plus ROI,
you can do that through doing for example what I call lease options. It’s a
form of seller financing. That’s actually how I built my original portfolio and
the reason why I like it is it takes a little bit more hands-on work that a
property management company doesn’t know how to do but it is more than doubles.
Sometimes quadruple as profitable as doing a rental. When I compared doing my
lease options in my backyard or doing my out-of-state real estate, they both
produce between 20 and 30 % annual ROI and here’s the good news if you’re
just getting financially trained. The financial markets have a hard time doing
anything better than 4, 5, 6, or 8%. Right now, your S&P 30 year
average is somewhere under 10 % and when you compare that to the stock
market, 401k’s, IRAs we’re blowing it out of the water. It means that you can
actually work way less of your life because you’ve got your money working
for you instead of you working for it. So friends that’s the information today on
how to invest successfully in the best out of state markets. If you want to know
how to tap into my team who’s buying houses literally every single day, just
click the link below. You’re going to find some help right there.
You can talk to a member of my team to learn what that looks like. You also can
get your hands on a free copy of my book. I just got this year’s truckload in and
I’m giving them away at no cost just cover the shipping on it and I’ll be
able to put that right in your hand. Hey, thanks so much for watching today and
make sure that you are a subscriber. I got videos coming out every single day
designed to help you become financially free and live your life’s purpose to the
fullest extent.Take care and we’ll see you tomorrow.

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