I am a new investor, I would like to know your experiences of how do due diligence for a property in another state.
Thanks for your help.
Hi @Hai Van Nguyen ,
I think you could be talking about two things here. There's:
- "Due Diligence" the formal real estate lingo defining the period in which you get to thoroughly vet the property you're looking to purchase.
- Due diligence in the sense of I just want to initially see the property and decide if its worth pursuing.
For #1 ---
Due diligence is just the period where you get to vet the property. This typically includes at least:
- General Inspection
- Termite Inspection
- Home Appraisal
- Repair Requests
Your team - real estate agent, mortgage lender (assuming you have one), and property manager (sometimes) - can help you organize all of the above. That ball is not in your court.
For #2 ---
Just trying to get a sense of if a property is right for you can still take a significant effort. I look at this from a few different ways.
- Building a team!
To be successful at distance, you must have a good team. This starts with finding and interviewing real estate agents who are interested in working with you as an investor. I used Thumbtack to take bids on who to work. Over a short period of time, the wheat will be separated from the chaff. You can pick someone who's (A) attentive to your needs, (B) very knowledgeable about the area, (C) not just trying to sell you any house.
- Technology to enable the team
I use Google Sheets to track all of the properties in play with my real estate agent. We also use Duo to view all of our homes together. This has worked wonderfully.
- Run your own analysis
Absolutely make sure the deal makes sense for you! If the numbers don't work out, walk away or you'll have a huge headache on your hands. There's no better way to undermine diligence than getting into a deal that makes no financial sense :)
Hope this helps,
Thank you very much Steven.
I use "The Property Investor Notebook" by K.P. Lee, to help with due diligence on properties. It makes things much easier when viewing the property and helps me remember to check everything. Amazon sells it for under 10 bucks.
I will look for it.
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