In 2016, deals no longer made sense in my own backyard.
I started searching online and found that I could buy a duplex elsewhere for half of what it would cost in my local market of Seattle, WA.
So I decided to purchase my first-ever out-of-state investment, choosing Indianapolis, IN as my target market.
Which, by the way, felt like taking a monumental risk at the time.
I was investing in an area I didn’t know. With people, I’ve never met. Relying solely on videos and the local team’s word. Something most investors are fearful about when thinking about out-of-state deals.
But there was a thesis I had to test: proving that you can get cash flow and appreciation out-of-state. Even though it was a new experience for me, with all kinds of factors that could go wrong, I took the leap regardless.
Several years later, this property was the reason why I created this community. To fast track your progress to financial freedom through closing deals on your terms.
Because despite being in the industry for 9 years at the time, it took me 3-4 months of research and prep to close this deal.
Most investors in our community now have the tools to close deals in as little as 30 days.
So I thought it might be helpful to reflect with you on how this first out-of-state investment went.
Here are the numbers:
Purchase price: $155,000
Upfront Renovations: $19,000 which included crawl space remediation, new flooring throughout, kitchen remodels on both sides, bathroom renovations, and attic mold treatment.
The property cash flowed roughly $10,000 each year for 4 years, except in 2020 when we did some remodeling and added new HVAC updates, resulting in a $15,000 loss.
Total initial investment: $60,000
Cash flow: $25,000 (less $15k HVAC)
Net Profit Sale: $153,000
Total return: $178,000
I gained a 296% Return on Investment on my first out-of-state purchase! I ended up using the profits to purchase a 1031 exchange to purchase a 7-unit in Michigan.
And even better, I was able to bust the myth about investing in Midwest properties — deals in the Midwest do go up in value when you buy right.
If I had not taken the leap, I would have never gained the experience and knowledge of buying and selling out-of-state property.
Don’t wait to buy real estate, buy real estate and wait! By wait, I mean wait for all the opportunities that are bound to come.