Tips for investing outside your marketplace
Hello BP members,
After a recent meeting with some fellow investors in my marketplace Cleveland Ohio it was scary that we all have stories of out of town investors contacting us to check in on their properties that they own in our area. These calls are common and we usually receive them when a property manager stops returning calls or a tenant stops paying. What is not common is these investors had purchased properties that were sold to them as turn key, cash flowing properties that they paid market+ prices for and when we visited these properties they were actually "shell properties" worth a couple thousand dollars. Hard working investors getting hustled by local snakes!
I am not sharing this story to scare investors away from Cleveland. We have lots of great ethical investors to work with here and our rental market offers excellent returns but here are a few tips to prevent investors from getting burned when buying in other markets
1) Always have your property inspected! Its worth spending a few hundred dollars to find out if you actually have a great deal. If its a bad deal losing $200 is less painful then losing $40,000
2) If its a rehab property you are investing in hire a 3rd party to check in on your contractors for you. This can be anyone with a camera and basic real estate knowledge. before you pay your contractors schedule this person to take pics and shoot video of your property to be sure your contractor has done everything they are requesting funding for. I've seen investors pay contractors based on bogus photos the contractor provided to them costing them thousands!
3) Always get a warranty deed! Quit claim deeds are cheap and easy but a lot of luggage can come with those titles. Its worth paying a title company to be sure you are investing in a clear title!
I realize these tips should be basic knowledge but after what I've seen recently investors are being seduced by some really smooth talkers! Never forget this is a business do not feel ashamed to call someone out or hire babysitters to help protect your investments!