"Long-Distance Real Estate Investing" by David Greene

Summary: A review & notes from David Greene's "Long Distance Real Estate Investing: How to Buy, Rehab, and Manage Out-of State Rental Properties".

 

Body:

 

When I saw BiggerPockets Publishing was coming out with a book on long-distance real estate investing, it became a priority for me to read. I am interested in investing out-of-state and in many states, but there remains so many unanswered questions about the process because most books assume you will be there to physically view the property.

 

"Long Distance Real-Estate Investing" by David Greene assumes the opposite. It goes in to detail about how to buy, fix, and flip or rent a property without ever visiting the property. It focuses on investment properties for rental and assumes you will be doing all the work yourself. It doesn't cover turnkey properties except to explain what they are.

 

I was particularly impressed with some of the ideas in the book in terms of adding value to a property. It discusses adding square footage and adding bedrooms. One thing I never thought of was the idea that you can buy a property in a rental neighborhood (2 bedrooms standard) and convert the property to a 3 bedroom to add value for later when you are ready to sell.

 

Another interesting topic in the book was portfolio LTV. Loans can be taken out against multiple properties and your financial strength will be viewed based upon how much equity you have in all your properties as a ratio of their value. It is important to keep less than an 80% LTV across your portfolio if you want to remain an appealing loan candidate.

 

There was also a detailed section of acquiring portfolio loans. Greene suggests establishing a relationship with a credit union and agreeing to redeposit loaned funds into the bank. I think it would be a good idea to open an account in each city I invest with a credit union and have the rent deposits go to these local branches as opposed to transfering them out to a larger national institution like Chase.

 

One thing I thought the book was missing was details on property managers. I'd like to know what they are paid (he only mentions 5-50%) and which of the national chains (ex. RentersWarehouse) are worth considering. I would also have liked to see case studies from some of the properties he purchases remotely including how he made them cashflow without ever visiting the property.

 

Biggest Takeaway: Obtaining the first four fannie mae loans is pretty easy. Loans six through ten are more difficult however and require a minimum credit score of 660. Also, while fannie mae limits you to 10 loans, they don't limit what size those loans are (besides the cap). In other words, consider getting ten $500k loans as opposed to ten $50k loans.

 

Biggest Takeaway: Obtaining the first four fannie mae loans is pretty easy. Loans six through ten are more difficult however and require a minimum credit score of 660. Also, while fannie mae limits you to 10 loans, they don't limit what size those loans are (besides the cap). In other words, consider getting ten $500k loans as opposed to ten $50k loans.