Long Distance Real Estate Investing

Have you ever wanted to invest in residential real estate to diversify your investment portfolio away from stocks?  If you are ready to get started investing in real estate on your own, you may want to read my book on Real Estate Investing.

You may have the money to invest, but maybe you don't have the time to look for properties and do all the work involved in buying a property.  Maybe your local real estate market is overpriced and it's very hard to find good deals and especially properties that produce positive cash flow.  Maybe you live in an area where the cost of real estate is low, but the investment opportunities just aren't very good in terms of cash flow and / or long term appreciation.  Being able to easily invest in good markets across the United States would help overcome these obstacles, however this is a difficult proposition.

I have done long distance real estate investing myself and can speak from experience.  Fortunately I was lucky to find a good, hard working real estate agent, lender and property manager who were able to work with me remotely, but that's not always easy to do.   Needless to say, finding, purchasing and closing a residential real estate investment remotely was challenging and there were many obstacles including just finding a property, completing inspections (my agent took lots of photos and sent them to me to review), finding a lender, getting through the loan approval process, finding a property manager, getting the unit ready to rent, finding a tenant, etc.  In my case, I found a property in Hawaii and got a national lender on board initially, but when they did their due diligence, they found the building was a residential building in a nonresidential zone (grandfathered use) and they didn't want to do the loan.  I ended up having to extend the closing date and start over.  Fortunately I was able to find a local bank who was able to do the loan, since they are more familiar with that situation and was able to close the deal but what a headache!

However, if there was a platform that served up vetted properties for sale, leveraging big data about markets, cities and individual properties and also facilitated the transaction from sale, loan origination, closing, preparation for rental, property management and ultimately disposition, that might be interesting.  Especially if you could still earn a competitive cash on cash return as well as total return, even with all those services provided.  One such platform I have discovered is Homeunion (brief introductory video below):

As you can see, the process is pretty simple and it truly is full service.  Their total returns over the past 12 months across the different markets they operate in aren't too bad and range from 10.04% in Chicago to 16.53% in Dallas.  Annualized net operating income (cash on cash return, unleveraged) is in the 4% to 5% range.

If you are looking at long distance real estate investing, Homeunion or other platforms like it might be a good option for diversifying your investments.

Disclaimer:  This is not a recommendation to invest and you need to make your own investment evaluation.  I have invested in Homeunion's Fix and Flip fund this year but I have not purchased real estate on their platform.  I have not received any compensation for this post from Homeunion.