How I Bought an Out-of-State Investment Property From My Call Room


If you’ve read anything at all on this website, you know that as a doctor, I’m always looking for opportunities to grow my passive income streams. I’ve discovered many ways of doing this, but I must say that one of the best ways I’ve found is through the direct ownership of real estate.

However . . . I live in Southern California. Needless to say, the prices on investment properties here are astronomical. The rent doesn’t even come close to covering the expenses. Because of this, I found it easy to fall into the same mindset that most potential investors living in high priced areas share: I can’t invest in real estate because it’s too pricey here.

“Live where you want, invest where it makes sense”

I’m a fan of the Real Estate Guys podcast, and they repeat the above mantra time after time. After getting this pounded into my head so often, I finally decided to see if I could invest in a different part of the country—one that might have the right numbers to provide me some cash flow. I did some research and eventually identified some promising cities in the Midwest that fit my budget.

However, I also identified a couple of major issues with these prospects. First, how could I possibly know where to buy if I don’t live there? Second, and perhaps most important, how in the world would I manage the property from 2,000 miles away?

Like any good medical professional, I got to reading. To be successful in this new endeavor of finding an out-of-state investment property, I found out that I needed to assemble a super-team consisting of a real estate agent (to help decide where and what to purchase), a contractor/handyman (to fix the property up), a property manager, and a lender (to help finance the property).

Honestly, finding those first three team members seemed like a very daunting task. I started calling around to find random agents and looked for leads on forums, but I just wasn’t getting very far. At some point, a colleague of mine suggested I just go through the company he used to accumulate eight out-of-state investment properties: Homeunion (disclosure, HomeUnion is a recent sponsor of the site).

Intrigued, I went online to their website and was greeted by a very catchy tagline:

“You invest, we do the rest.”

After having tried doing it the hard way, those words were like music to my ears. After all, doctors are pretty strapped for time. I decided to go for it, and put my criteria in their form. Since this was my first out-of-state investment home, I had no desire to go overboard with it. I picked $100,000 as my purchase price. I wanted a blend of cash flow and appreciation, and it seemed balanced.

I got an entire list of potential properties, went through their detailed analysis, and called their company to hammer out the details over the phone. They helped me find the property and set me up with a lender. Now, they manage the property, and even oversaw the renovation of the property.

By the end of forty five days, I was the proud first-time owner of an investment property in … Indianapolis, Indiana. It seemed crazy being so far away, but it worked. Here are some of the numbers quickly:

Purchase Price $104,900
Down Payment (20%) $21,610
Repairs $6,600
Cash Flow ~ $400/mo.

Cash on Cash Return once stabilized ~13.8%

As for the management, after they helped me find a tenant, I’ve only ever received one email notification, which informed me of a necessary AC repair. I authorized it, they got it fixed, and billed me. Other than that, I get a direct deposit into my account every month. Does it get better than that? I don’t think so.

Still, I’m keeping my fingers crossed, but so far so good. I’ll keep you updated.

So, did I actually buy this from my call room? Absolutely, the research for the purchase was done online as well as the e-signing of all the documents for the sale were performed from the comfort of my call room (of course while not being asked to perform patient care).

Anybody else bought any out-of-state real estate investment properties? What’s your experience been like? Let me know in the comments.


  1. I’m curious how your experience has been 6 months after you posted this. I’d like to get involved in rental real estate in the next few years.

    • You’re right, I should give an update once in a while. Since this post, I’ve received one email a month from the company that tells me to check my statements and I get a direct deposit into my checking account. They negotiated a two-year lease so currently it’s on autopilot until mid 2018 (knock on wood!). Happy in this case not to have anything exciting to report.

  2. Oooh, an update if possible. I’m way too chicken, 2000 miles is so far. I was thinking a property maybe 20-30 miles max away from our current hub. Have you heard/participated in crowdfunding real estate?

  3. Hello,
    I’ve been running into your site now and then because of the passive income interests I suppose. You have some really informative articles so thanks. If you dont mind sharing, what is the monthly rent you are getting? I’d like to compare it to where I live in FL.

  4. Hello! So is this property completely yours? Say you wanted to kick the tenant out, could you decide to live in it if you really wanted to? (Not saying you do but just wondering how much of it is all yours). So if you are getting 4800 a year, it’s going to take you 20+ years to break even? Or am I just not understanding it correctly?

    • Hi, yes, it’s completely mine. Title is under my name and I can choose my own property management. Not sure where you’re getting the 20+ years but here’s how I basically look at it. If I’m cash-flowing $4800 a year and I had to put in ~26k to purchase it (the rest was a loan), assuming there’s no change in cash flow, I should have a total return on investment in about 5-6 years, after which the cash flow paid for my initial investment and I “break even.” However, that’s thinking about it only in terms of cash on cash return. Don’t forget, there’s appreciation in value of the property and tax benefits as well.

      • Do you include the loan as a negative on your net worth? Or is the $4800/yr already subtracting what goes towards the mortgage?

  5. What fees do you pay to the company for handling everything? And maybe more importantly, how do you select a company, aka know they have good judgement regarding everything from what constitutes a good purchase to finding good, reliable contractors, repairmen, etc.? And that the assessments of the property and likelihood of return they provide are accurate? I’m sure there are several companies out there like HomeUnion. (Hopefully your answer can be candid and free of bias, considering the sponsorship of your site…) Thanks in advance!

    • I believe they charge 3.5% of the sale price and then 10.5% of the rent (only when occupied). There are a handful of companies but this is the biggest and operates in several states. The fees are high, but you get a turnkey operation.

      • Hi Wealthy Doc,

        May I ask, since this is new to me. I haven’t heard that a PM charges a percentage on the sell price. Don’t they only get involved after you’ve purchased the property and the agents take their 7-10% real estate fee. Is the 3.5% an upfront cost, kind of like a security deposit when you involve them?

  6. Thanks for sharing your experience.
    How about insurance and property taxes? Is this cash flow net, after mortgage, insurance, and taxes?
    Also, do you have liability insurance, in case anything happens in your property?

      • Beautiful!
        We have a cabin which is on Airbnb and still unde our name. I need to put it under some sort of protection. I thought a Family trust had the best protection. But will research LLC too.
        Thank you again!

        • They type of trust matters when it comes to asset protection. A revokable living trust does nothing to protect your assets as far as I know. Make sure you consult with a good asset protection lawyer!

  7. I just got off the phone with HomeUnion. They said we need to have a %40 down payment plus 10% reserve plus a $11,500 rehab fee plus lots of fees and taxes.
    Also the self managed IRA has to be funded with the money rolled over from our other IRA accounts.
    Did I miss something here?
    How did you buy a property with only $26,000 down?
    So they have other options they failed to mentioned to me?
    Appreciate your response.

  8. Yeah, it seems they have increased their down payment requirements. I am trying to compare the best company to go with considering I am halfway across the world currently. I read who used Roofstock. Sounds like he had a few headaches with the process. Maybe less fees but sounds like less hands-off too (i.e. more paperwork then he expected). Maybe I will just do some REIT investing while I am overseas and then acquire more property when I get back to the states…ho hum.

    • Looks like the type of loan they are using requires %40 down.
      At this point, their system only makes sense if you buy cash and want to hold on to your property for over 5 years since it will only start making you money after 5 years. Their fees and rehab money eats away your first 5 years of profit.

      • Couple things I noticed: 1) If they require you to put 40% down, you’re likely in a better cash flow and equity situation especially if the market takes a downturn. 2) Their rehab fees go directly towards rehabbing and building equity in your home. As opposed to other turnkey companies where they sell you the place fully rehabbed and give you the after repair market price. The question here is would you rather buy a fully rehabbed place at full market price, or buy a property and rehab it yourself . It’s just what your preference is. You’re also able to write off those rehab fees off as expenses offsetting capital gains for the next few years.

        There are benefits to each turnkey company – ease, location, etc. Just have to figure out what you’re comfortable with.

        • Yes. I understand the rehab fee.
          But what I wanted to mention is that the true fact is that for a $100,000 property, you need about $65,000-$70,000 upfront as opposed to $26,000 you mentioned, In case you didn’t know and unintentionally are miss informing your followers.

          • Just had an in-depth discussion with them yesterday. They’ve been slowly moving away from the lower priced older homes with more deferred maintenance and overall more headaches. They tell me that most of their clientele are busy professionals who would rather get into something a little nicer with both cash flow and appreciation potential. That way they not only get a little cash into their bank account every month but build their net worth at the same time. For example, appreciation on a 150k home in a nice school district will appreciate much better and have much better tenants (and less headaches) than a 60-70k property in an older house in a C class neighborhood where you’d need to replace the roof soon and more likely deal with evictions. You can still put down 20% anytime to buy these properties, but in order to cash flow in some of these nicer properties, the numbers work out that you need to put a higher down payment. Their projections reflect that.

            Again, depends on your goals. If you’re looking for the highest return on investment, cash flow play, it might be better to go after a 40-50k property in a not so great area. There are companies that help people buy these properties like Memphis Invest and Morris Invest. However, it comes with its own set of risks and headaches. Sounds like Homeunion has gone away from those properties so you may not be able to get something exactly like mine at this point. It’s worked out for me pretty well so far, but it’s definitely not a significant appreciation play.

            Personally, I’ve tried to accumulate rental properties in different areas and different types (single family, condo, multifamily) for diversification and to learn about each. I’ve realized it starts with your goals and you can see where and what investment fits into that. Hope that helps!

  9. I have been doing this for 20 years ! Lived in Saskatchewan but purchased everywhere from UK to whistler . ( not in US though). I didn’t need a company to do this for me ( what do they charge anyway ?). I just found the properties and asked the realtor to help find me a local management company . The loan / mortgage is arranged locally anyway . I don’t understand what is so special about having a broker to simply find you a property manager ?? Seems like a waste .

  10. Hello. Thanks for all your info. Im looking at buying my first rental through home union. I was wondering if you could answer this for me. Can I put a property into a LLC at a later point in time and still have the loan under my name?

    • You can, although the bank reserves the right to call the loan in that situation. Everyone I’ve talked to about it says that the banks never seem to do that. In fact, I’m doing that with one of my properties as we speak.

  11. Their fees are pretty high at 10.5% a year. Don’t these add up like other investment feeS? My current properties are at 8%.

  12. Are you planning on buying other properties with them? I’m talking to them currently. Management fees are very high (10.5%) compared to my other rentals at 8%. Just like with mutual funds, I think these things add up and compound over time eating into returns. But I like idea of hands off. I don’t have time to find deal and crunch numbers myself across country on MLS.

  13. Hi Passive Income M.D.

    How is/did the Indianapolis, Indiana property do?
    The two-year lease until mid 2018 should be up.
    Anything exciting to report?


  14. Hi, I’d love an update also! Very interested as I’m looking to build cash flow over the next 10 years to the point of having enough to live free.

  15. I look forward to the update!

    I’m assuming that the $400/month of cashflow is without setting reserve money aside for capital expenditures and vacancy, right?

    I’m in the process of purchasing a single family rental with a turnkey operation in Alabama, so would love your opposing perspective on another avenue.


    — TDD

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