In the process of overcoming my fear as an out of state investor, I'm determined to take action and not allow my fear to prevent me from pursuing real estate. The risk with doing nothing is far greater than taking action assuming I have calculated the risks and ensure there are mitigated plans in place should something unforeseen happen. A big problem I'm finding though is being able to perform due diligence on properties that come onto my radar in a short amount of time. Indy is such a fast pace market that I'm unable to get another set of eyes on the property in time before another investor snags it from underneath me. Sure, I could lock it under contract, sight unseen, and perform my DD then but I'd hate to be the guy that locks up everything but only closes on a small percentage. Most wholesalers are asking for a 14 day closing period. Is that really enough time to get a contractor or home inspector to review plus create the paperwork that helps you make your final decision?
How are other OOS investors closing on properties quickly? Thanks in advance.
Are these wholesalers really offering you that good of a deal once all things are considered? I can tell you that if you can find a good agent and good PM it'll help with helping you focus in on good deals and then being able to set up inspections etc, but you might not get off market deals that way.
@Matt K. based on the info they provide and the research I do from home, they seem to be good deals on paper. Key word is "on paper". But actually viewing the property up close is a different story.
@Justin Young I don't close on anything in 14 days and I haven't had much luck with wholesalers. Mostly because the deals don't look good to me. Well, they do on paper but when I dig into *their* numbers something is always off. Who knows, I'm sure there are good deals out there but that's really here nor there when it comes to getting things under contract when you're out-of-state.
My method relies on my property manager who also functions as my agent. Some pops up on the ol' MLS and she can tell me about the area in 30 seconds, drive by the property in a day, and usually get inside in under 3 days. I have to admit, for the most part this just screens out a lot of "deals". She knows what I like and can tell me pretty quickly if it's for me or if it isn't. She has a contractor that she works with that she can drag along if it looks like (from the outside) that it's going to need some work. At that point I can either put in an offer or book a plane ticket.
I will say that I've been working with her for years so she knows how I like my properties kept up and what will likely fit into my sweet spot. And I'll also point out that 99% of the time (a little hyperbolic) it turns out there's a reason not to move forward with the deal.
All of that aside, if you haven't picked a market, don't have someone you trust, are vetting deals on paper from wholesalers, etc. you're going to have a tough time. I can't tell you how many times I've had a deal that looked on paper and in pictures and driving to the property (and seeing the neighborhood) I decide it's not the right deal for me before I even get out of the car.
@Andrew Johnson is spot on... so many "deals" are anything but that. You also need to understand your market and yourself before you try to get anything under contract. A "cheap" property that "makes" money is going to be the total opposite when you get a problem with it have turnover and don't have a solid team in place to take care of it.
I'd find a good PM and agent first (could be the same people) and then start looking at deals, they'll be able to help you write good offers that will get you under contract/give you the time you need to do proper due diligence. But more importantly they'll eliminate most of the noise that can be overwhelming OOS.
Aloha! I just visited Maui for the first time to celebrate my birthday in February so seeing your post made me smile :-)
I would also suggest that you have a few trusted RE professionals wherever you're investing so that you don't have that fear and less stress. Start building those relationships now. It's crucial that there is trust on both sides - you want to know that your agent/PM will act quickly on your behalf to investigate the property, send you pictures, etc. and he/she wants to make sure their time is not being wasted because you are actually giving them business.
@Andrew Johnson , it sounds like your agent/PM does exactly what I do here in Maryland. You sound like you would be a perfect fit for the type of investor I enjoy working with so if you start investing near me, please reach out to me!
Best of luck to you!
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing