Location, Location, Location (The Best Location for a Fix and Flip)
When it comes to real estate, we constantly hear how important location is and how important it is for anyone in real estate to know their market. But, with mainstream media being focused too much on the location that will bring the highest return, Many investors try to look for a location out of state. But, that is not always the way to go. Today, we sat down with ZINC owner and industry expert, Todd Pigott, and asked where is the best place to invest in a Fix and Flip? Todd, an experienced investor himself, has experienced many different markets in many different states. Here is some helpful advice that you may not have heard in the mainstream media of Real Estate investing.
While you may be encouraged to invest in places where you will get the highest return, Todd recommends that you stay close to where you live. Our average investor that tries out of state, typically cannot keep up with the high demands of their investment property. This is simply because Fix and Flips are extremely hands-on. Another important factor that Todd points out is, “that you can’t be successful if you do not thoroughly understand the market you are investing in.” Most investors that try out-of-state Fix and Flips get too caught up in the possible return that they could receive without looking at the big picture. For example, investing locally may give you a smaller return than investing out of state, but you will run into fewer problems because you will be able to be present.
“You can’t be in two places at once,” this age-old saying describes Todd’s, and most other investors, experience of owning multi-family and/or single-family residences out of state. He states, “the hardest part about investing out of state is the simple fact that no one is going to care about your investment other than you and when you are not physically there to care for it, there is little opportunity for success.” When an investor relies on third-party vendors and managers it creates a huge obstacle. Trying to manage contractors and/or tenants in another state is nearly impossible unless you plan to travel there on a weekly basis. Todd says, “Regardless of what the periodicals say, it is better to make a few bucks less and know your market, rather than trying to manage an investment property out of state. It is too hard to build long-term wealth with that kind of strategy.” Focus on what you know. An investor that knows their market and is able to maintain a hands-on approach will always win in the end.