Categories: Podcast

114 – Purchasing Properties Out Of State Through Auction To Boost Your Returns – Naya Zhao

Synopsis:

Naya is an investor in the Bay Area and was featured back on episode 75, where she talked about asset protection. Today she’s going to tell us how she uses the BRRR strategy to purchase properties out of state at auction, rehabs the properties, and uses a professional property management team to rent them out. If you’re interested in creating instant equity and building a portfolio of cash-flowing rentals, you need to listen to this episode.

Key Points:

Team up with the right people to get access to good deals and systems. You need about $100,000 to cover the acquisition and rehab fee, but you should be able to refinance out of it in a few months and keep that money working for you.

Show Notes:

Reasons To Invest Out Of State

Investing in California real estate is expensive, but is doable out of state for under $100,000. If you do it right, you can do up to 4 properties a year. Investing out of state doesn’t require a lot of capital and the return is much higher.

How To Pick Markets

Naya picks high growth markets with a low unemployment rate. One of the cities she invests is in Indianapolis. Indianapolis has a population of 2 million people and their unemployment rate is less than 4%. Their sports, health care, conventions, education, government, and pharmaceutical companies are growing. The city is rated as a top 5 city for high tech job opportunities in the United States. All those things show that the job opportunity is flowing and the houses Naya normally selects are the area that the city already has plans for.

Buying Properties

Naya buy houses way below market rate in real estate investment. Naya talks about making money when you buy and everybody wants to have that kind of deal but doesn’t know how to get that kind of deal. She usually does it through auction. She has a specialist that evaluates if the house is a good deal.

Who Manages The Property

Naya works with a company called Alpine. Alpine is actually a full-service company. They do everything from buying to managing the house. They are not like other companies as they also do the rehab. All of the fixes are listed and will be presented to you. They only manage the house for people who buy houses through them. The property management team is in-house and don’t outsource anything.

About Alpine

Alpine is a full-service company and was established 15 years ago. Aaron Adams is the owner. Aaron used to be a high school history teacher. He’s a very enthusiastic, passionate and aggressive investor. So after he figured out the system on how to do this on his own, he moved out of California and went to other states to do the investment. He then helped others on how to invest.

List Of Fees

Auction fee is $2,500 per auction. For example $80,000 total price. The house was bought for $50,000. On top of that, they charge $2,500 for auction fee and the rest of the money is for rehab. They will give you a very detailed list and a lot of pictures of the house. They will also provide how much the house is worth as well as the houses in the neighborhood are worth and why did they buy the house. And also they will tell you how much the house can be rented.

Tips For Investors

In out of state investment, it is very important for investors to know who your working or your partner is. You don’t want to fly to fix a small problem.