Out of State Investing Realtors

Buying & Selling Real Estate
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Out of State Investing Realtors

Geo A.
Rental Property Investor · Madrid, Spain · Member since 2014 · 134 posts · 18 votes

I am in the process of investing in out of state properties. doing my research on the forum 3 things are key. (1) a good PM and (2) a good trustworthy realtor and (3) a good RE attorney.

(1) and (3) are doable by reading reviews and doing some standard interviewing with them - however I have an issue with (2). Any one who's been doing out of state REI can recommend some questions to ask for the Realtor to see if they're a good fit?

Checking the reviews, most of the realtors bought houses for ppl locally which is a very different process from the one I am doing. I need them to go there, record videos, and pretty much act as myself on the ground - A LOT OF TRUST involved although I will personally go there and check out the property myself the day when i'll bring an inspector. How do I know the realtor is doing his job and taking my interest first and not having me buy a property that we could have gotten for cheaper just to make some extra bucks?

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Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
12y

Well I do commercial real estate and I am investor myself.

I do not mess with houses. I do know that out of state investors are typically searching for yield they can't get in their own backyards OR it's that they can get the same cap rate locally but prices where they live are 200k versus 60k in another market.

The out of state investors have a lot of lag time in making decisions. This can cut out many good deals as local investors are ready right away to put under contract when a property hits the market.

A seasoned broker/agent should be qualifying you the investor. If they are not then run away from them. The amount of work you are wanting to analyze properties being an out of state investor isn't all that unreasonable. I would think before a broker/agent committed to doing that they would need to see you are realistic in the price you want to buy at and that you had funds and financing in place. Proof of funds with your bank statement blackened out would suffice valid within the last 30 days.

Really I do not think agents will squeeze you over 1,000 sales price higher. It could happen but not often. If you are a one off type buyer and tapped out then maybe if they were unethical they would squeeze as much out of that one transaction as possible. If you represent ongoing business then say paying 5,000 more on a property equates to another 150 bucks on commission before a broker split so I do not seeing them risk the relationship for that.

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  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    12y

    Well I do commercial real estate and I am investor myself.

    I do not mess with houses. I do know that out of state investors are typically searching for yield they can't get in their own backyards OR it's that they can get the same cap rate locally but prices where they live are 200k versus 60k in another market.

    The out of state investors have a lot of lag time in making decisions. This can cut out many good deals as local investors are ready right away to put under contract when a property hits the market.

    A seasoned broker/agent should be qualifying you the investor. If they are not then run away from them. The amount of work you are wanting to analyze properties being an out of state investor isn't all that unreasonable. I would think before a broker/agent committed to doing that they would need to see you are realistic in the price you want to buy at and that you had funds and financing in place. Proof of funds with your bank statement blackened out would suffice valid within the last 30 days.

    Really I do not think agents will squeeze you over 1,000 sales price higher. It could happen but not often. If you are a one off type buyer and tapped out then maybe if they were unethical they would squeeze as much out of that one transaction as possible. If you represent ongoing business then say paying 5,000 more on a property equates to another 150 bucks on commission before a broker split so I do not seeing them risk the relationship for that.

    Podcast Guest on Show #47
    NNN Invest53 Reviews
    WebsiteView Page
    1Reply
  • Geo A.
    OP
    Rental Property Investor · Madrid, Spain · Member since 2014 · 134 posts · 18 votes
    12y

    You make a great point on their incentive to make more money not being realy worth it... thanks!

    any tips on interview questions I should ask to make sure they're a good fit?

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  • Biren Soni
    Involved In Real Estate · Atlanta, GA · Member since 2013 · 11 posts · 7 votes
    12y

    Hello G,

    If you are interested in Metro Atlanta, GA properties; please let me know. I am a licensed GA Real Estate Agent and looking forward to working with investors like yourself.

    Thanks,

    Biren

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  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y

    You definitely want to ask them if they are investors themselves, or have some actual knowledge of investment properties. Most agents don't (although they will tell you they can find you an investment property...all the while they have no real idea what constitutes a good property). That will be the hardest part- finding one who actually does know something about investing. Once you find that, you will be much better off because they will likely be more up on you wanting them to be eyes on the ground, etc.

    What markets are you looking in?

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  • Geo A.
    OP
    Rental Property Investor · Madrid, Spain · Member since 2014 · 134 posts · 18 votes
    12y

    @Ali Boone I am a big fan of your posts. Glad to get your input on this one.

    You definitely want to ask them if they are investors themselves, or have some actual knowledge of investment properties. >>>>> well this is a 2 edged sword no? There's a high chance they'll take the best deals for themselves. But I agree that would be a plus to have a REI mentality that many realtors don't have.

    What markets are you looking in? >>>>> I just started looking in VA. The numbers make more sense over there for buy&hold investors than where I currently live (Boston, MA).

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  • Jeremy Davis
    Canal Winchester, OH · Member since 2014 · 151 posts · 55 votes
    12y

    @georges arnaout, I guess i get to be the 1st person to chin in and defend the real estate agent.

    As a agent and a investor myself, MOST ( yes i said most not all ) will not try to cheat you out money! yes we do get paid more but having a higher selling price but we will never get repeat business if we screw over every client we ever get it would kill us in the long run! Me personally i love working with investors as i hope to build a relationship with you and you continue to use me as your agent so i will alway fight for you as my client! If you trust me to fight for and i trust that next time come into town to buy a house we work together then of course ill always fight for you needs.

    As far as what to ask an agent, I would find a agent you can talk freely with. you just was to have great communication with them on any topic! and when they send you a video of the house you should be able to tell them " no i don't like that house for reasons A,B,C, and D and explain to them why and you want them to understand. That agent should want to work for you and work to make you a happy client!

    just my 2 cents on the topic.

    Jeremy

    1Reply
  • Marco Santarelli
    Specialist · Orange County, CA · Member since 2008 · 2k+ posts · 623 votes
    12y
    Originally posted by @Geo A.:
    I am in the process of investing in out of state properties. doing my research on the forum 3 things are key. (1) a good PM and (2) a good trustworthy realtor and (3) a good RE attorney.

    Hi George - Welcome to BiggerPockets!

    (1) A good property manager is critical - in fact you want a "great" property manager. I half-jokingly say that you "live and die by your property manager". They are managing your assets!

    (2) The idea of working with a realtor assumes that you're going to be reviewing and possibly buying property of the local MLS. Although there are good deals to be found if you look long and hard enough, or submit enough offers to eventually snag a good deal, it is not the only source for you. Consider that you can work with builders, or talk to property managers to see if they have properties for sale by their clients. Of course you can also work with a passive/turn-key provider of off-market properties.

    (3) There are many good real estate attorneys, and you should be able to find a good one simply through referrals. (I'd be happy to share ours with you.)

    Continued success!

    1Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y

    It may be a double-edged sword but more likely not. Reason being, even if they are investors themselves they doubtfully can buy everything good out there. Like I'm an investor but I'm not currently buying for myself (have bought in the past) and I help people find properties all the time. I only WISH I had enough money to buy every good property I know about :)

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