The REAL Secret to Investing Outside Your Backyard

**Michael Zuber** (0:01)
Long Distance Landlording, out of state investing. What are the keys to do it right? And what are the things that if you do, you are destined to fail?
Dana, the CEO of Himlain, you have seen lots of things. You have over 100,000 units, or some crazy number. So I'm sure you've seen lots of different things. This is an important topic, because more and more people are investing out of state, out of area. So I'm curious, what are things that you've seen that people do well and not so well?

**Dana** (0:31)
Yeah. So over 60% of our users are out of state. So that's majority are out of state. Now, what's interesting about that is that's users. If you actually look at units, the more units you have, the more you tend to have some physical presence there.
And so there's no right solution, but we really try to get our sales team to focus on discovery and really understanding who this person is, where are their units, who do they have as local support. Because the last thing we want to do is sell you on like, you can manage through software and a platform, and then suddenly you get this anxiety of like what's going on with my rental property and you have to physically get on a flight.
And so that's it. So it's interesting, I use the word out of state, but I define it as like, hey, the property is four hours away.
Because I think if it's three hours away, and again, it's number of units, and then how far away it is. If it's like three hours away, you could just drive out for a turnover, right? Which is really where a lot of the time you need to like oversee things, make sure things are done correctly. And then the real question is like, well, who do you physically know in that area? And so let me give you some examples of users in our system who do it really well. And then users on our platform who do it very poorly. And so the first one I'll give you is a real estate investor who has three properties. So it's a tri-plex in Florida, lives in California.

**Michael Zuber** (2:07)
Okay.

**Dana** (2:08)
He did something very well. When he went out to look at his tri-plex, he got the neighbor's contact information. They actually happen to be owners who live in the properties.
They are so incentivized to make sure the area is clean, landscaping, everything is done right. And so he said, I've got their contact information as an extra set of eyes, which is almost better than having someone who's not next to the property have to drive by.

**Michael Zuber** (2:37)
Yeah.

**Dana** (2:38)
And then on top of that, he has the world's best turnover crew, who when they turnover, fair price, do it well, very, very detailed. He's been able to manage his properties, I think, for like five years now on the Hemline platform. No issues, goes to the self-guided tours, meets with the tenants just virtually, or I think maybe he doesn't even do that, and properties always perform just so, so well. So that's an example of doing it very well. Yeah. Even at the small level, when you're starting One Rental At A Time and building up.
Sorry, go for it, Michael.

**Michael Zuber** (3:16)
No, go ahead. Go to the other side.

**Dana** (3:18)
Great. And then I'll give another one, where we have some real estate investors who are like, this one is an hour and 45 minutes outside of the Bay Area here, has 12 units on Hemline, totally manageable. Most things they can do remotely, sometimes they go over to the property on a weekend, just drive over there, drive back. I don't know if it's on their way to Tahoe or something, but seem to just do it well with 12 units. And 12 units, when you get to, I'd say over five units, you really need to make sure you have some local presence there. For sure. Right.
And so that's been done well. The other one I see is on-site managers. You have, if you have a 20-unit complex, even here in California, by law, you're required to have an on-site manager, discounted rent, someone who is your eyes and ears on the ground. That works really well.
Okay, let me give you the opposite of what we have. We have some users, I'm thinking of one with 91 units and constantly turning over their on-site crew. And all these properties, they're 18 units here, 25 units here, but all in the same city, constantly turning over the crew on the ground. When you get to that level, you need someone who is very qualified on your payroll.