"Investors" walking property, what's your take on it?

"Investors" walking property, what's your take on it?

Rental Property Investor · Dallas, TX · Member since 2019 · 92 posts · 15 votes

Here’s my question, are there investors out there that actually buy property without having seen them physically themselves; buying without stepping foot in and walking the floors?

The reason I ask is because when I was doing some wholesaling a little while back (I still wholesale), I would take tons of High Quality pics & shoot high quality videos, but no matter what when I sent them to my “investor buyers” they always insisted walking the property themselves... Because of this I began to place these “buyers” on a lower tier buying list (as in non-VIP buyers), especially after having read David Greene’s Book “Long Distance Real Estate Investing”. There’s a paragraph from the book that I’ll include here.

“people feel uncomfortable buying a property they can’t see in an area they don’t live in, and fear has a lot to do with it. The thing is, you aren’t buying a home; you are buying a small business—an investment. There aren’t many reasons to feel so afraid if you’re looking at things from an investor’s perspective. Investors focus on numbers; consumers focus on feelings. Going beyond our gut feelings as real estate investors forces us to get serious about our guidelines.”

The “Investors” on my list aren’t out of state either, they’re local to the area. You would think (at least I would) that if they were seasoned investors and they had plenty of pictures and videos and a great boots-on-ground person that they might not have to walk it physically, but I guess that’s just my train of thought.

What are yalls thoughts on this?

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Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
6y
Originally posted by @Jonathan Newsome:

@Theresa Harris thank you for you reply. While I agree that there are plenty of scams going on out there what’s the point of having a boots on ground team, such as a contractor, agent, and photographer etc if they’re not going to fully utilize them, especially when we have extensive footage and experienced personnel on the team...

 I guarantee you someone taking photos and video will miss stuff and most likely expensive stuff. If I wanted to I could photograph/video a house and “miss” $20,000 worth of issues. No matter who someone works with, it’s the investors money at stake and I don’t blame them one bit in wanting to see it. Personally I’m not buying a house I can’t walk through either.

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    6y

    There are too many scams out there and you are investing a lot of money when buying a place not to walk through it.  Plus photos don't tell everything-too easy to miss problems by not photographing them or being able to do things like turn on the water, check the windows, etc.

  • Rental Property Investor · Dallas, TX · Member since 2019 · 92 posts · 15 votes
    6y

    @Theresa Harris thank you for you reply. While I agree that there are plenty of scams going on out there what’s the point of having a boots on ground team, such as a contractor, agent, and photographer etc if they’re not going to fully utilize them, especially when we have extensive footage and experienced personnel on the team...

  • Rental Property Investor · Savannah, GA · Member since 2018 · 174 posts · 129 votes
    6y

    @Jonathan Newsome Is there an inspection contingency allowed in your typical contract?

  • Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
    6y
    Originally posted by @Jonathan Newsome:

    @Theresa Harris thank you for you reply. While I agree that there are plenty of scams going on out there what’s the point of having a boots on ground team, such as a contractor, agent, and photographer etc if they’re not going to fully utilize them, especially when we have extensive footage and experienced personnel on the team...

     I guarantee you someone taking photos and video will miss stuff and most likely expensive stuff. If I wanted to I could photograph/video a house and “miss” $20,000 worth of issues. No matter who someone works with, it’s the investors money at stake and I don’t blame them one bit in wanting to see it. Personally I’m not buying a house I can’t walk through either.

  • Rental Property Investor · Dallas, TX · Member since 2019 · 92 posts · 15 votes
    6y

    @Dylan H. But of course there is and I understand the full use of it, but I’m just trying to figure out why the need to walk themselves as opposed to using their “team”. It’s honestly a waste of my time and resources if I’m bringing along market experts such as contractors, agents and photographers and getting detailed information for the buyer, if they’re just going to walk it themselves out of fear.

    That’s the reason I quoted the book, that paragraph resonated with me and THOSE are the type of buyers that I need to work with; they know exactly what they want, they’re serious and let numbers and “proof” guide their judgement, not emotion.

  • Rental Property Investor · Dallas, TX · Member since 2019 · 92 posts · 15 votes
    6y

    @Brian Pulaski sure, I agree with that as well, but as investors we know that we’re taking on a certain level of risk. The idea is to minimize/reduce that risk and that can be done by having the right teams and people in place. That’s like buying an auctioned property, then pulling back a wall to find horrific damage or mold. Sure you can miss it, but the goal is to be thorough.

  • Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    6y

    Its simply a matter of responsibility. Not fear.  I am responsible for my money. If you want to take responsibility for that 20k issue that was missed, then sure. But since that wont happen then i need to make sure i understand what i am getting into. 

    Sure, at some point this model breaks down, but for a fixer that is being sold by a wholesaler? You bet i would want to walk it. 

  • Rental Property Investor · Dallas, TX · Member since 2019 · 92 posts · 15 votes
    6y

    @Mary Mitchell and I totally get that. What I’m also just trying to figure out I guess is, WHERE ARE THESE INVESTORS THAT DAIVID GREENE MENTIONED!! Lol that wasn’t a yell at you by the way, it was to the BP forum 😁 . I think I may have 2 or 3 buyers that will actually BUY a property without having to physically walk it... and as I stated before, I know some aren’t comfortable with that for whatever reason it may be, but I think David G. Hit the nail on the head when he said it just comes down to fear, whether it’s fear of risk, fear of mistake, or fear of not being able to physically see/touch the property.. here’s another short paragraph from his book, “The whole thing just feels natural, doesn’t it? You have to walk the halls, get a feel for the layout. You want to be excited and feel good about a purchase this big, right? How can you know what you’re buying if you don’t go look at it? It’s just common sense to think that the risk gets bigger the farther away it is from you. The problem is, when I ask people why they believe that, or what they are basing this belief on, they usually can’t come up with many objective facts to back it up.” This then leads into the paragraph that I posted initially in my thread starter.

  • Member since 2017 · 37 posts · 8 votes
    6y

    If you are dealing with local investors they will want to walk the property because it is easy. It will be dumb not to if you are close by. However if you are dealing with investors that are out of state then they likely won't walk the property. 

  • Real Estate Agent · Santa Barbara, CA · Member since 2016 · 518 posts · 283 votes
    6y

    @Jonathan Newsome the real buyers are going to want to walk the property.

  • SC · Member since 2017 · 78 posts · 63 votes
    6y

    So, I'm confused.....  What is your motivation for delivering high quality pictures and videos to the buyers?  Are you simply one of those perfectionists who gives way to much to make a sale and be a good friend? Cause if you that's what you are shooting for, keep in mind, its very easy to tell that type of person "No" and not buy anything.  I know this because that's me.  Thats why im a software engineer now.  Regardless of knowing that you can close sales with the same tactics you can pick up women, I have always tried to go the extra mile (uh...cough.. only with sales.)  But think about it... you're shopping for a car, and the salesman jokingly says "I think this 370z is bit too much car for you....  maybe we should go look at the Sentras" ... Damnit, now I have to buy the 370z to prove I can handle it.  But if you walked on the lot, and a salesman brought you a cup of coffee, had you're car washed while you were looking around, followed you around like a puppy, while constantly fact dumping, while tossing in little polite, considerate questions about your family, you would have a far easier time telling him bluntly "nope... no 350z, I have 6 kids so we should look at the minivans...."  Its a sad but true, time tested, rule.... treat the customer a little crappy and they will want to make friends with you... well, most of time at least...

    Now... If that's not you then I would suggest that overkilling the presentation on a used product, you may be actually trying to pull a "slight of photo" move to draw attention away from something undesirable.  Is that what you are doing?  Either way.... and I sincerely mean only to impart logical consideration when I state the following.  The reason the buyer has the resources, and you may not is a result of you believing that making a decision to put some skin in the game (ie... the money) should be able to be influenced by someone who has no intention of putting their own skin in the game. 

    If the first example  was you take pride in the fact you are an honest, eager to please, hard working individual.  If the second scenario is more accurate, and you are not ACTUALLY trying to sell polished turds C.O.D, I would suggest putting your own resources on the line once to become more familiar with your buyers and what is important to them  And I can assure you... any VIP buyer, who has places high value on photos... won't be a VIP buyer for long...
    Sincerely though good luck!  

  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    6y
    Originally posted by @Jonathan Newsome:

    @Theresa Harris thank you for you reply. While I agree that there are plenty of scams going on out there what’s the point of having a boots on ground team, such as a contractor, agent, and photographer etc if they’re not going to fully utilize them, especially when we have extensive footage and experienced personnel on the team...

     They may have their own team who can do it, but if you are the one selling the property, then you benefit from the sale.  They can have their people walk the property, but those people would be independent (like an inspector) and not benefit from the sale.

  • Rental Property Investor · OK · Member since 2019 · 126 posts · 114 votes
    6y

    I guess I am the outlier here but I've bought several properties without ever physically walking through or even looking at them. With that being said, I trust the people and teams I have in place to check out these properties for me. It really takes the emotion out of a deal when you haven't walked the place and you can focus purely on numbers. If I didn't trust the teams, I would want to walk through myself.

  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    6y

    @Jonathan Newsome

    The difference is you are not their "team". You are looking at selling it to them for a profit (Nothing wrong with that) however your stance is that "They should just trust you and the team you put together to make money for yourself". 

    I have several properties available if you want to just send some checks out I promise they are worth what we are asking, my team vetted them for you.

  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    6y

    @Jonathan Newsome I would not assume that someone who wants to walk the property is not an investor. Things you cannot detect in pictures:

    1. Person taking the pictures has control over what you see. Most people don't take pictures of problems.

    2. You can't detect smells in pictures. Urine or smoke remediation could cost thousands.

    3. Lay of the land. I have heard of out-of-state investors buying properties that turned out to be at the bottom of a hill, therefore prone to flooding. You cannot detect drainage issues from photos.

    4. Neighborhood and neighbor issues. The neighbor could be a hoarder or have 4 outside dogs that bark all day. There could be a traffic noise. 

    None of these things may prevent you from buying, but they would also affect your offer price. I would not need to be the one that walks the property, but I would need a trusted person to do it for me. Maybe I would trust a wholesaler after we did some deals, but trust is built. 

  • Rental Property Investor · Dallas, TX · Member since 2019 · 92 posts · 15 votes
    6y

    @Joe Splitrock so what I’m gathering from most of these replies is, trust is a huge factor in this process.

    Also by some of these replies, I feel that I am hearing from a lot of local/in town investors, not a lot of out-of-state investors. The ones that replied with, “ I don’t have to walk the property myself physically”, mentioned that they have teams or people in place whom they trust. Someone also mentioned that they might buy from a wholesaler if they had done plenty of deals with them before and trust them. With that being said, I guess the buyers on my list just don’t trust me enough or my judgment, but they sure as heck keep buying from me, kind of odd I suppose... maybe I should find people that I can build real relationships with and trust my judgement.

  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    6y
    Originally posted by @Jonathan Newsome:

    @Joe Splitrock so what I’m gathering from most of these replies is, trust is a huge factor in this process.

    Also by some of these replies, I feel that I am hearing from a lot of local/in town investors, not a lot of out-of-state investors. The ones that replied with, “ I don’t have to walk the property myself physically”, mentioned that they have teams or people in place whom they trust. Someone also mentioned that they might buy from a wholesaler if they had done plenty of deals with them before and trust them. With that being said, I guess the buyers on my list just don’t trust me enough or my judgment, but they sure as heck keep buying from me, kind of odd I suppose... maybe I should find people that I can build real relationships with and trust my judgement.

     Pretty much every story I hear from investors who got burned is people who made out-of-state investments. If you have a good network of local investors, it seems you have a good situation. If people keep buying from you, I wouldn't worry about it. 

  • Member since 2020 · 53 posts · 23 votes
    6y

    @Jonathan Newsome It's not necessarily that your current contacts are people that you should stop working with so that you can find people who do trust you, it's more about continuing to build rapport and building trust with your current contacts. It'll take time, but I would be willing to bet that anyone who trusts every sales person they meet has probably has a lot of stuff they don't need as well as a house and car that's more than they need as well. So keep grinding, be nice and most importantly (in my sales experience) don't screw anyone over. As soon as you screw 1 person over, it's very hard to regain any trust with your clientele because word will spread.

  • Specialist · Cleveland, OH · Member since 2018 · 1k+ posts · 666 votes
    6y

    @Jonathan Newsome Yes I have ,probably about 20 out of the 500 or so. HOWEVER we do walk the exterior. We have to assume it needs everything on the inside so our offer is priced accordingly. Have we gotten fortunate that the inside needed only cosmetic and actually made more then we expected, yes, Has the inside needed even more then we thought yes, so we did not make as much as we wanted, but still did ok. 

  • Rental Property Investor · New Orleans, LA · Member since 2018 · 24 posts · 16 votes
    6y

    @Jonathan Newsome

    I have bought three properties I was not able to enter.

    Last year I bought a 4 plex without seeing inside all of the units. The big issue I had to fix was replacing the drain lines under the slab in the kitchen in two of the units. I’m keeping this building so I had all of them replaced for $3200.

    I bought a flip property last year from bank. No inspection. Didn’t even tell my wife.

    Closing on a duplex this month. No inspection and I haven’t seen one of the units.

    In all of these situations I have stolen the properties and there aren’t really any issues I haven’t seen before that I can’t fix.

    My purchase price always reflects the risk. All of these have been off market deals.

  • Rental Property Investor · Dallas, TX · Member since 2019 · 92 posts · 15 votes
    6y

    @Simon S Marthinsen great write up and fantastic info! I knew there were a few out there that buy “like this”. I was simply posing this question so that I could hear both sides of the story and figure out what it is that makes one less “fearful” or more apt to buying without walking the property physically. Now, did you have teams or people in place to give you the information you needed to make the purchase or were these completely “blind purchases”?

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Mr. Greene is alluding to those who have their own teams in place.. that have a fiduciary to them.
    you as a wholesaler have no fiduciary perceived or in reality.. also pictures as others stated simply dont tell the whole story and never will.. but if your buying 30k beaters thats one thing.. your buying a 200k house that needs a 100k and will flip for 450k well those you should look at yourself
  • Rental Property Investor · Dallas, TX · Member since 2019 · 92 posts · 15 votes
    6y

    @Jay Hinrichs thanks for Chiming in Jay, I’ve read quite a few of your posts and responses to threads and know that you bring experience to the table, not to say others don’t, im just a bite more aware of your reputation (from online of course).

    I do agree that buying lower priced homes would be much different vs buying 200k houses. I also think it has a lot to do with risk tolerance and as others stated before the teams they have in place. I think I’m starting to see the pattern though.

  • Rental Property Investor · New Orleans, LA · Member since 2018 · 24 posts · 16 votes
    6y

    @Jonathan Newsome

    If I can’t see inside the building I’ll try to find old mls listings to see what it looked like the last time it was sold/rented.

    Most of the time I can make an educated guess If it will either be a gut job, a rehab involving some mechanical repairs/drywall work/kitchens/baths, or a pure cosmetic reno.

    If the place has a meter I know someone has lived there in the last 6th months. Then it most likely won’t be a full gut job.

    I take an extremely conservative approach. For my 4 plex I paid $160k. Estimated 40k in reno but spent $60k. The overage came from spending more on flooring (bought LVP), Plumbing drain issue, added 2 parking spaces, and redid the roof. I'm refinancing it at $380k. I'll cash out $65k at 75% LTV. Gross rents are $4600 month.

    My basic strategy is to buy pre-foreclosures. I look at various foreclosure lists, find the owners name on the tax assessors website, and grt the phone number from Whitepages premium. These properties i frequently can’t enter. The sellers typically lie to me about the condition and forget to disclose stuff. I make my offers accordingly so it doesn’t really matter what they look like inside. If I hate what I see inside after closing I can sell my position to another investor at a profit.

  • Kenneth GarrettPro Member
    Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
    6y

    @Jonathan Newsome

    If you have a team in place then I would agree know need to walk it.   Most investors don’t have the size of team you are referring to.  I have walked many properties where the photos and/or videos do not reflect the actual condition of the property.  I’m not saying they are staged, but they artistically taken to avoid the flaws and some major ones.  Keep providing quality information and you will land an investor where the trust with you is so great, they will buy on your recommendation.  It takes a lot of trust, earned trust to buy without the walkthrough.  Keep up the good work.

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