Out-of-State Real Estate Investing: How to Fund Fix-and-Flips With Hard Money

Out-of-state real estate investing can feel risky at first, especially when your home market is expensive and competitive. But according to real estate investor and senior account executive Andrew Worth, most of the rules stay the same. The biggest change is simply the distance, and that’s something you can plan for.

This guide breaks down out-of-state real estate investing into simple, repeatable steps: how to build a local team, set a buy box, underwrite flip vs rental exits, and use hard money loans for fix and flip deals to close faster.

In a recorded conversation with Matt Kamp (DealMachine), Andrew shared how he started investing from the Northeast into the Charleston area, what he learned from his first deal, and what lenders look for when funding fix-and-flip projects. The framework below is designed to help newer and experienced investors reduce risk and move with more confidence.

Quick Summary

• Out-of-state investing works when you build the right local relationships first.
• A clear buy box and defined exit plan reduce “decision drift.”
• Underwrite every deal as a flip and a rental to protect your downside.
• Hard money loans for fix and flip can close fast, but only if your file is ready.
• A detailed scope of work is one of the biggest drivers of faster underwriting and appraisals.

Out-of-state investing works when you treat it like a system. Build a local team first, underwrite conservative numbers with a flip and rental backup exit, and keep your loan file ready (LLC docs + scope of work) so hard money funding can move fast.

In an episode of the DealMachine REI Podcast, Matt Kamp sits down with investor and Backflip senior account executive Andrew Worth to break down out-of-state investing, hard money funding, and how to close deals faster. Want to hear the full conversation? Watch the full episode below:

What is out-of-state real estate investing (and why do investors do it)?

Out-of-state real estate investing means buying property in a market outside where you live. Many investors do it because local prices are too high, competition is too intense, or better opportunities exist elsewhere.

Out-of-state investing is a way to buy where the numbers work, even if you don’t live there. The fundamentals don’t change, buy right, budget conservatively, and manage risk, but distance makes your team and systems more important.

Mini glossary (quick definitions)

• ARV (After Repair Value): the expected resale value after renovations.
• Buy box: your rules for what you will buy (area, price, rehab level, exits).
• Scope of work: a line-item rehab plan used for underwriting and appraisal.
• Hard money loan: short-term financing for purchase and rehab, commonly used for fix-and-flips.

When your local market is expensive, what changes out of state?

When you invest in a different state, you can’t rely on quick drop-ins or last-minute fixes. You win by being organized and building a team that can operate without you physically present.

Andrew’s point is simple: even if you live in the same city, most investors aren’t at their properties every day. Out of state just forces you to run the project like a system earlier.

How do you invest in real estate out of state with no local team?

Andrew got started in his late twenties while living in the Northeast. He and a close friend had talked about investing for years, but high home prices made the entry feel impossible. The turning point came from a relationship: his former neighbor was a general contractor (GC) who moved full-time to the Charleston area and offered to manage a project if Andrew wanted to buy there.

That one relationship made the first deal possible. Andrew and his friend bought their first property in the Charleston–North Charleston market as a fix-and-flip, but it eventually became a rental.

Start out of state by building relationships before you hunt properties. A strong GC and a trustworthy agent reduce risk more than trying to control everything from afar.

What roles do you need first to invest out of state?

If you’re doing anything beyond turnkey, prioritize:

• GC (General Contractor): budgets, scope accuracy, rehab timeline
• Local agent: comps, neighborhood insight, resale strategy
• Property manager (optional but smart): protects the downside if you pivot to rental

Where can you find a local team in a new market?

Andrew stayed active in local investor communities and Facebook groups in his target market. The goal isn’t just to join groups, it’s to identify who:

• finishes projects on time
• communicates clearly
• has references and proof of work
• understands the neighborhood price point

What lessons does a first out-of-state deal teach (and what should you do differently)?

Andrew’s first deal taught him what most rehab investors learn quickly: not one project goes exactly according to plan. Once walls open, surprises show up. In his market, termite damage is common, and scope changes can push numbers fast.

He shared that the project ran roughly $15,000–$20,000 over the expected budget.

Your first rehab will almost always uncover surprises. The safest approach is to have a clear plan, build contingencies into your budget, and avoid deals that only work if everything goes perfectly.

How do you build a smarter construction budget?

Andrew’s advice for newer investors is straightforward:

• Get a real quote from your GC (not a rough guess)
• Assume something will be discovered behind walls
• Include contingency so you don’t panic when scope expands
• Stay conservative on numbers, not optimistic

Why does your exit plan affect your rehab decisions?

A clear exit plan changes how you renovate:

• Rental: durable, cost-controlled finishes
• Flip: upgrades buyers expect in that neighborhood and price range

When you decide early and stick to the plan, you’re less likely to overspend on the wrong items.

How do you create a buy box for out-of-state investing?

After 11–12+ deals, Andrew became stricter about his buy box, the filter that defines what he will and won’t buy. A buy box helps you avoid chasing “almost” deals.

A strong buy box often includes:

• target neighborhoods and property type
• price range and rehab depth
• exit options you’ll accept
• minimum margin and contingency expectations
• timeline and holding-cost assumptions

A buy box keeps your investing focused. It reduces mistakes by narrowing your targets to deals that fit your strategy and risk tolerance.

How do you underwrite a deal as both a flip and a rental?

One rule Andrew still follows is underwriting every deal with a backup plan. If the property can’t sell for the expected price, the rental numbers should still make sense.

Underwriting a deal as both a flip and a rental protects you from market shifts. If the flip exit weakens, the rental option can prevent a forced sale.

A simple underwriting approach:

• Flip version: conservative ARV, realistic rehab, full holding + closing costs
• Rental version: conservative rent, real expenses, and debt service that still leaves room

If neither exit works under conservative assumptions, it’s usually not the right deal.

What is a hard money loan for fix-and-flip investing?

Hard money is short-term financing typically used to buy and renovate properties for resale. Andrew described Backflip as a hard money lender focused on supporting fix-and-flip investors, and noted he was a borrower himself before joining the company.

A hard money loan is short-term funding used to purchase and rehab a property. Approval often focuses on the deal’s numbers, purchase price, ARV, rehab scope, and timeline, rather than traditional income verification.

What do hard money lenders require for a fix-and-flip?

Andrew described the core items lenders review:

• Purchase price and contract
• ARV supported by comps
• Rehab budget and scope of work
• Timeline and execution plan
• Borrower experience (helpful, but not always required)

He also emphasized that good lenders help investors think clearly. Sometimes that means flagging risks when a deal looks thin.

How do you close a hard money loan in 10–14 days?

Hard money can move fast, but speed requires preparation. Andrew consistently came back to one bottleneck: missing documentation, especially an incomplete scope of work.

The fastest hard money closings happen when your documents are organized before you go under contract, your scope of work is detailed, and you respond to requests the same day.

Hard money “ready file” checklist (save this)

• LLC documents (articles of organization, operating agreement)
• EIN confirmation letter
• Purchase contract
• Scope of work (line-item)
• Rehab budget + timeline
• 3–5 comps supporting ARV
• Contractor bid + contact info
• Partner/entity details (if multiple LLCs or partners are involved)

Why is the scope of work such a big deal?

Andrew explained that many lenders order the appraisal once they have the scope of work because it supports value and rehab assumptions. If the scope comes late or is vague, the file often slows down.

What does “being responsive” actually mean?

Responsiveness is a two-way street. If a lender requests a document and it sits for two or three days, the closing timeline slips. Quick replies keep the file moving and help protect your contract deadlines.

Out-of-state investing success checklist (simple and repeatable)

Use this as a practical baseline:

• Pick a target market and learn comps
• Verify a GC and a local agent you trust
• Define your buy box before you shop
• underwrite flip + rental backup exit
• set a communication rhythm (weekly update + photo log)

If you’re building your first out-of-state deal pipeline, keep your buy box and “always-ready folder” saved so you can move quickly when a good lead hits.

What are the most common mistakes in out-of-state investing and hard money funding?

Most issues are avoidable with a few disciplined habits:

• Chasing deals before building a local team
• Not defining flip vs rental exit upfront
• Underestimating rehab and skipping contingency
• Submitting a vague scope of work
• Responding slowly to lender requests and delaying closing

Key takeaways (simple and actionable)

• Don’t fear out-of-state investing; the fundamentals still apply.
• Build relationships first. Strong teams lead to strong deals.
• Tighten your buy box so you stop chasing marginal properties.
• Always underwrite a backup rental plan in case your flip exit changes.
• For hard money, a detailed scope of work and organized LLC documents speed up closing.
• Fast closings require fast borrower responses.

FAQ: Out-of-state investing and hard money loans

Can I invest out of state without visiting the property?

Yes, but you need a strong local team and clear communication. A trusted GC and agent reduce execution risk, and a rental backup exit can protect you if the flip timeline changes.

What documents do I need for a hard money loan?

Most lenders want LLC documents, an EIN letter, the purchase contract, comps supporting ARV, and a detailed scope of work with rehab budget and timeline. If you have multiple partners or LLCs, have that ownership info ready too.

What is a scope of work for a hard money lender?

A scope of work is a line-item list of renovations, costs, and timeline. Lenders and appraisers often rely on it to support ARV assumptions and keep underwriting moving.

How fast do hard money loans close?

Closings can often happen in 10–14 days when the file is complete, the scope of work is ready early, and the borrower responds quickly to requests.

What is ARV in a fix-and-flip?

ARV stands for after-repair value. It’s the expected resale price after renovations and is one of the main numbers lenders use to evaluate a fix-and-flip.