Podcast 120: Investing in Out-of-State Rental Properties with Lane Kawaoka

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Lane Kawaoka is my guest on this week’s episode of the InvestFourMore Real Estate Podcast. Lane is a full-time engineer but also loves to invest in real estate. Lane has always worked on the west coast or Hawaii, where it is really hard to find cash-flowing rental properties. He has had to invest out-of-state to find deals that made sense to him. On this show, we talk about how he first got involved in real estate and how he both bought houses from turn-key companies and  on his own. We also talk about what his current goals and how he is changing his investing strategy.

Click the green button below to listen to the podcast

How did Lane first get involved in real estate?

Lane graduated college and became a full-time engineer about ten years ago. He wanted to buy a primary residence but had to save up money to afford properties in his area. He finally bought a house for himself, but it was not as great as he thought it would be. He was always traveling for work and never had a chance to enjoy his home. He decided to rent out the property, and that became his first rental.

How to use house hacking to buy rental properties.

Lane realized he loved the passive income that his rental property provided, and he decided to keep buying rentals. He bought a duplex in Seattle for $250,000. That duplex rented for $3,000 per month and was also a great investment. The problem he ran into was the market exploded in Seattle much like it has in Colorado. His duplex was worth $400,000 a few years after he bought it, but rents had barely risen. Finding any good proprieties in the Seattle area was really hard.

How to invest in rentals when prices are high.

How did Lane start investing in out-of-state rental properties?

Lane knew he could not invest in the Seattle market any longer, so he looked into turn-key rentals. Turn-key rentals are properties that have already been repaired, rented out, and have property management in place so that investors can buy a property and start making money immediately.

Lane bought a property in Birmingham Alabama for $70,000 that he rented out for $850 per month. Lane bought a few more turn-key properties and then started to buy properties himself with the use of agents and property managers.

How did Lane make sure he bought good turn-key properties?

Lane has a number of tips for people looking to buy turn-key rental properties:

  • Get a 3rd party to check out the neighborhood and area if you are not familiar with it.
  • Don’t be afraid to find your own property management company.
  • Sometimes, buying properties with a loan can be a benefit because you need to get an appraisal that will confirm the value.

I also think people looking to buy a turn-key should not be afraid to get an inspection done on the house. You could even order a BPO to be done on the property.

How to complete due diligence on a turn-key property.

How has Lane bought out-of-state rental properties without a turn-key company?

If you want to buy out-of-state rental properties on your own, it can be tough, but it is possible. The problem with many turn-key companies is getting a good deal is very tough. If you can find deals yourself, you may be able to make more money. However, you need to find:

Lane has bought a number of properties outside of his areas without using a turn-key company. He said the key to pulling off the investment was finding a great property manager. If you can find a really good property manager, they can help you decide where to buy properties and what they will rent out for, and they can help you find contractors and agents.

How to invest in out-of-state rentals.

How can you contact Lane?

Lane loves to help others invest, and he is also working on syndicating large multifamily deals. Make sure you listen to the podcast to hear what his plans are with apartments and why they have become his focus over single-family rentals. You can find lane at simplepassivecashflow.com,where he has a podcast and many free resources for investors.

Fix and Flip your Way to Financial Freedom available as an audio book

My fix and flip book is now available as an audio book after I completely re-wrote it and had it edited. I included much more information on finding deals in the book as well as how I have been able to flip so many houses this year. I will come close to selling 30 houses in 2017! Get the book here: Fix and Flip Your Way to Financial Freedom: Finding, Financing, Repairing and Selling Investment Properties.

Transcript coming soon!

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2 Comments

  1. Akin Okegbile September 27, 2017
    • Mark Ferguson October 1, 2017

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