Out of state investing

7 Replies

I'm in California and I'm looking at a few opportunities in Texas.

I've heard of people buying property unseen and putting all their faith (and trust) into a local investment group.

If the people you're working with are on the up and up, you've seen pics of the prospective investment properties, and contracts and title are good to go....is there still a reason to actually visit the property and meet the people you're dealing with?

I'm a mortgage broker and half the time I don't even actually meet the people (usually attend signings, but some cities I do biz in are like 100 miles away).

Thoughts?

You don't want to put faith in anyone but yourself. You do, however want to analyze any deal - local or out of state. Just because you see a property doesn't mean it is going to work out for you.

If you hear about a deal from an investment group, investor, or realtor out of state, buying it sight unseen works providing the numbers do as well. If you do your homework and the numbers work out, then the property is worth considering for purchase. I would never buy a home without seeing it unless I was confident in the inspection.

I've bought properties without ever seeing them because I was confident in the numbers, and after the inspection, I was confident in the property itself. It doesn't hurt to have contacts elsewhere, though. If you've got someone you trust bringing you deals, then you should have all the more confidence that the next one will be "legit".

You may want to look into a turnkey investment . See a virtual tour . And if they are brand new no rehab needed . Check out their research and do your own as well . Make sure the area has strong demographic growth Look for a strong growing and diverse economy , look for an area of growing retirement population , look for new and substantial infrastructure changes . Only buy in undervalued markets . Always acruire property with strong potential for apprecition . Look for tighteng vacancy trends and always provide the rental that renters prefer.

Thanks for the advice everybody!

I totally agree with the "if the numbers work" idea. It's pretty straightforward.

My concern is getting scammed in some way by a "local investment group".

The guy I'm talking with now does sound legit, so I'm not too concerened, but you never know.

Let me post my standard "warning" to Californians, of which I am one, I've just lived in TX for the past 25 years.

Yes, we all know prices are lower here, and consequently so are rents! Those are the only things that are lower though. Our property taxes are THREE TIMES what yours are (at least in the bigger cities and better school districts). Our insurance rates are NOT REGULATED so you may be a bit surprised by what you pay here versus there.

I keep hearing and reading posts from people who cite a (IIRC) Business Week article about how good appreciation has been in TX the past few years. DON'T BELIEVE IT. Our appreciation of home prices averages about 3%, the reason the statistics show higher AVERAGE SALES PRICES are due to the huge numbers of new homes being built in those markets!

When you factor in all the bells and whistles put into new homes, larger square footage, media rooms, granite countertops, etc; the average sales prices are much higher. But when you factor out the new construction a lot of established (more than 2 years old) neighborhoods have not had any appreciation to speak of!

I can drive you to neighborhoods in Austin and Houston and show you newer developments with lots of out of state (CA) ownership. They're easy to spot by the large number of recently finished houses with FOR RENT signs in the yards, and an equally large number of negative cash flow owners on the tax rolls. I could probably do the same thing in DFW and SAT with just a bit of searching but I'm real familiar with the HOU and AUS markets.

Not saying don't invest here, just FLY DOWN and ask to see some real numbers before you write that check.

all cash

Thanks for the heads up All Cash.

I figured as much. I'm not looking to flip anything or expect huge gains in the next yr or two, but what I am looking at is buying bargain properties and having someone actually pay them down. Buy and hold strategy.

So I'm not expecting 10 to 20% gains like we recently had here in California, but rather having long term investments and possible cash flow.

I'm aware of the taxes and the annual assessments. 2-3%?? Mannn, that balances things out real quick

:D

Originally posted by "LoanOfficer650":
I'm in California and I'm looking at a few opportunities in Texas.

I've heard of people buying property unseen and putting all their faith (and trust) into a local investment group.

If the people you're working with are on the up and up, you've seen pics of the prospective investment properties, and contracts and title are good to go....is there still a reason to actually visit the property and meet the people you're dealing with?

I'm a mortgage broker and half the time I don't even actually meet the people (usually attend signings, but some cities I do biz in are like 100 miles away).

Thoughts?

Hire a local realtor to look at the property. That's what I do and I pay about $100 - $150 each time for due diligence work.

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