Do most long distance investors see the property in person before buying?

Question

Hello, just finished David Greene's "long distance real estate investing" book. Do most of you when buying anything from 3-10 units physically go see the property if its out of state? What do I know the inspector wont find? Any info on your processes would be appreciated.

Michael Dumler · Answer

@John B., chances of you finding something that your inspector won't is highly unlikely. A seasoned inspector is there is find everything that is or could go wrong with the property. If decide not to view the property in person, your real estate agent should be providing vids/photos of all requested areas/items. The key here is having a grounded relationship with your agent and inspector. Needless to say, a lot of agents will try to burn out-of-state investors to earn a quick commission. Hope this helps!

Bryan Hartlen · Answer

@John B. I think you’ll find that the answer to the question is that it depends. It depends on- how good your local team is (or how good you are at building a team)- how organized you are - when you’re not there to see things you need to be more thorough in the questions and processes you use to ensure you are getting the property, rehab and tenants that you expect- how well you are buying your properties - there is a greater opportunity for mistakes so you need more cushion- your personality: do you need to know every micro level aspect of the project or are you comfortable managing it at a macro levelWe’ve bought 10 value-add SFR properties without every seeing them. We’ve kept 5 and flipped 4.  Our first few we’re more bumpy than our last few as our processes have improved. That said, you were asking about purchasing 3 - 10 units…. We’re currently looking to move into small MF space (10 - 40 units) and our plan is that we would physically visit the property during due diligence to get everything set up and to increase the odds that we quickly identify more of the differences between SF and MF investments.

Nathan Fisher · Answer

I have a client who bought 7 properties unseen in a land contract.  He had a different PM to walk them and didn't get an inspection.

He eventually has to pay 950,000 for the 7, in reality 3/7 were uninhabitable, and the others were in terrible shape. They were worth less than 450,000 on a good day. He doesn't have the resources for the repairs, so he's going to lose his land contract down payment 130,000.

Matthew Crivelli · Answer

@John B.

If you're not going to walk the property yourself you better have a really good working relationship with whoever is on the ground. You can't always trust people earning a commission if the deal closes. (R.E. Agent / Wholesaler)

Gerardo Waisbaum · Answer

Hi John,

I live in Israel and I own 8 single families and one 7-unit multifamily property in Jacksonville. Most of them I purchased without seeing them in person before the closing. I work closely with my agent an inspector and a GC which I trust.

I did come for the DD of a 32-unit MF property in SC. This is something that I wouldn't skip.

I try to visit Jax a couple of times a year and the main purpose of those visits is to strengthen relationships, create new contacts, identify gentrifying neighborhoods, and see new opportunities.

Gerardo Waisbaum · Answer

I'm sorry to say that your client is not a very smart guy, to say the least, if he puts 7 properties in contract with no inspection period and no inspection. I don't think this is a valid argument for not purchasing properties without seeing them in person. Having a team that is not related to each other (realtor, inspector, PM, GC) is critical.

Dan Portka · Answer

@John B. I've done 5 out of state BRRRRs and only saw 1 before I purchased it. The one I did see before purchasing just happened to be a potential deal that came up while I was visiting the market for the first and only time a couple years ago. I always get a professional inspection and as others have said, get someone else you trust to go see the property. My PM will go to the property for me and give his thoughts - potential rent, estimate on rehab cost, neighborhood quality, etc. Contractors are good people to lean on as well, although it may be difficult to find one to give you a quote before you're under contract because of the amount of time it takes them (I've paid a contractor before to get me a quote on a property before).

John B. · Answer

That is wild, id 100% have every unit inspected and want pics/videos etc. I can come in person, I just dont know enough about construction etc to most likely find anything.

Do most long distance investors see the property in person before buying?

Most Popular Reply