Would you buy a property without viewing in-person?

33 Replies

As quoted by some of the great titans throughout history, time is the most valuable asset that people possess. Time spent on viewing and maintaining a property can be leveraged towards finding your next deal and building more passive income. Given the growth of technology, the world has become a smaller place where we can communicate with people across different time zones on demand and build our network. I am conducting research to investigate how technology can be utilised for streamlining the due diligence and buying process from the comfort of our homes/offices. I’d like to leave you with this question and kindly request your thoughts: Would you consider submitting an offer for a property located in another part of the world without physically viewing the property, but instead using tools such as your devices to conduct virtual tours and local representatives to validate the property?

My biggest problem with out of area house looking has been outdated google street views plus good property photos that aren't a representation.  A virtual tour doesn't tell me if the floor is sloped or squishy in a spot, or if the house smells and I'll likely have to seal everything, etc.  It also won't tell me if an area is declining for a particular reason or set to explode.   I just responded to a post from a fella that is looking to invest from cross country, near me.  I know for a fact that some people are taking advantage (maybe it's too strong of a word) of out-of-state investors, so the local representative would have to very trustworthy and not someone that would profit solely from my buy-in; like an hourly wage versus commission or bonus.  There are good people in the world so not wanting to sound too cynical.  But, there's also funny stuff going on sometimes.

I would and I do buy the properties without seeing but I have my team looking at the property. Once offer is accepted, I hire a solid inspector to inspect the property. I always have inspection contingency if I haven’t seen the property. Also, got an insurance quote to get an idea on what it would cost to insure.

Alpesh,

All good points . . . I was thinking more along the lines of picking up a property in a random city  where I don't have 'people', because I've sure been tempted before.  I also found a good investor broker once who sort of required that I actually viewed a property before she would put in an offer.  I just paid for an inspection and had to back out because the seller was hiding stuff, and I was thinking how that could really add up so I'm really trying to eyeball things a little better before moving forward.  

But, I buy in a price point right now that includes some real rough stuff, and I'd probably be more comfortable in different price ranges where homes are better maintained.  I know people offer sight unseen and it works well for them.  

Glad you have a system in place that works for you. Cool thing about real estate is that you can make it your own.

Back to OP, I've seen some video tours and I really like that. Sometimes they walk too fast and they aren't common enough. I didn't want to do a video tour on my own listings (is that even a thing?) because I didn't want a thief to get a lay-out. But, I like it better than photos only. A guy in the REIA was doing something similar for out of state investors and it seemed to be helping. He knew what to mention and he was a good guy - I'd probably trust him from afar. I think he was wholesaling but I can't recall for sure.

I wouldn't buy it sight unseen...but I never see it before I make my offers

Thank you all for your thoughts. It is true to some extent that if you have little visibility of the demographics, financials and property condition, you could be at risk of a challenging purchase. Although most of the time, these processes are outsourced to financial advisors, property managers and real estate agents. Therefore there is an opportunity cost between time spent on viewing the properties that are only permitted by your immediate network, and time spent on finding your next deal which could bring thousands of dollars of cash flow.

What if there was a platform to create greater transparency of the properties that were on the global market without having to rely on word of mouth marketing. It makes sense to me to first find a property with a favourable yield (comparing real estate in UK, US, Canada and so-on), then find a local representative/agent to facilitate the purchase, rather then finding an agent that only shows the few properties in their portfolio.

The time it takes to sell a property can also be decreased by opening up your listing to the global market (i.e. marketing to overseas investors). I have personally found that I have very little visibility on what properties are for sale in a particular State in the US, as a resident of the UK. The only way this is overcome is by contacting local real estate agents who focus on a narrow portfolio and charge fees that can be avoided.

Not only would this open the marketplace for both buyers and sellers, it can also be used as a tool for investors to understand what yield they could be getting for their money. I.e. investing in a property in Canada could be more profitable than investing in property in the UK.

I believe this can be solved through technology, by networking with local representatives that can carry out the due diligence on your behalf and send you all the Management Information you need before you comfortable with placing an offer.

What happens after you submit an offer, and/or how do I manage the property from overseas?
As previously mentioned, you need to decide how you want to spend your time. Property management can be very time consuming investors need to ask themselves, is this the best use of my time for creating wealth? This is where leverage kicks-in; there are people around the world that manage properties for a living and enjoy doing it, where investors should be scoping the market for their next project.

I noticed trust can be an issue when transacting abroad. This is the same notion that AirBnB have overcome with their rating and review system, which now provides a safety net for people to invite complete strangers into their home in exchange for money!!! (A concept that would of been bizarre a few years ago). The rating and review system can help you find those trustworthy people out there with a good track record.

In a nutshell, more investors are looking to move away from becoming a landlord and moving towards investing in assets to create wealth without the mundane management responsibilities. To speed up the process and wealth creation, we need to tear down the barriers preventing investors from investing globally and getting the best return on their money.

All feedback is welcome!

Online tools and apps are great ways to screen properties and to learn the area but nothing fully replaces going there. I always visit before submitting an offer. It’s a big investment.

And my price point Charlotte, NC, properties are being snapped up within 36 hours of listing. After several weeks of sometimes not even getting in to see the property before a contract was on it, I did try this approach of making an offer sight unseen. When I did make it out to the property it was apparent that the photographs that depicted the property were significantly different than the actual property itself. It had been rehabbed and it obviously was the first rehab this owner had ever done because the craftsmanship was terrible. Paint application was terrible. Cabinets were not installed well. Shoddy carpentry work. A lot of problems with the house. I immediately asked my realtor to withdraw my offer. However, it did not appear to be a problem because I believe multiple offers were received on the house.

I think that if you have someone who can inspect the property for you that you can trust, this could be a viable strategy. I would follow the advice in the podcast specifically discussing investing out of state. I can’t remember the name of that episode at the moment. However I would be very wary to purchase a property based on photos, videos, or other online presentations alone.

@Richard as is the case with majority of investors across the world and I agree on your point that this is a large investment.

How often how you look to overseas for better yield?

If there was a opportunity to invest in Australia (as an example) presenting exceptional returns, and you had the option of employing local specialists at low fee (property management, property inspection) would you still consider viewing in person?

Things to consider:
- You have the ability to take live virtual tours
- You will have a rating and review system when employing local representatives to provide a detail report and images of the property
- You’re only concern would be decide on when to collect your cash flow and when to exit

To point out the elephant in the room, you are leveraging other peoples time across the world to build sustainable revenue channels, whilst getting access to a global library of property listings to compare yield.

As mentioned by the post below, listings tend to get snapped up very quickly. Being able to put down an offer after you have your ‘on the ground team’ do the work in exchange for a fee, means you can get in at the right time and at the right price point.

A final point to mention, the good deals tend to be ‘off-market’ and/or held by agents who release to their network. It then becomes a game of who you know and not what you you should know before placing an offer.

Originally posted by @Richard B. :

Online tools and apps are great ways to screen properties and to learn the area but nothing fully replaces going there. I always visit before submitting an offer. It’s a big investment.

 Why?  Wasted time.  Make the offer, inspect properties after offer is accepted.  Buy after inspection...if the inspection passes your approval.

@Benion Great feedback. I would like to point out a difference between site unseen and site vetted by a trusted support network and live reviews. If you like the building and people reporting to you are giving the green light on condition, does it not make sense to place an offer and secure your interest?

Saves you time and suffering the risk of losing the deal.

Adam

offering site unseen is easy except for retail-minded agent resistance, having a trusted person verify repairs needed during due diligence factored into your offer, is not easy, would it be your agent who does that?  getting any licensed inspector to inspect for fee is easy, closing is sort of easy except the going to u.s. consulate for notary is really sort of pain actually, getting any rehab done small, light medium post closing is not easy, having any project manager manage any kind of rehab is not easy, weather using conv, loan, using hard money even harder, more sweating bullets..all doable....trust, relationship key, vulnerability can be minimized but unavoidable.

matt, thailand

I think this is fine if the numbers work in your favor with enough fluff for wood rot repair, new appliances, HVAC, water heater, sever foundation and drywall repair, bad plumbing issues, and subfloor and other water related issues just In case these issues are present. Add about 15-20 grand in case you need extra repairs.

(214) 308-8779

@Matt Berklacy Thank you Matt.

Verifying repairs would be something to consider, especially to avoid being taken advantage off by property management firms. Can you explain more on the US consulate?

Where I see value is the supply of labour out there that can carry out the management tasks without the need for significant input from the investor. Think of them as an employee in the sense that they would need to be carefully vetted, and would only receive payment on rent collected and not rent due for management of the property. This provides an incentive for them to minimise costs and operate efficiently. In the meantime you as an investor are reviewing where you want your next project to be, and setting up the support and network you need in that particular area.

Value proposition of this platform:

- Submitting offers at your convenience and not at the leisure of an Agent

- Outsourcing property management to carefully vetted Property Managers

- Open your money to the global market vs. your local market

- Ability to market your property as a seller to international buyers (when you want to exit)

Adam

@Joe Villeneuve I buy commercial properties - purchase prices are higher and typically quite complex transactions. very easy to justify the time. It’s quite convenient that you don’t need to do that but I believe you must be working a different niche.

@Richard what are some of the pain points you experience in the acquisition and management process?

One thing I haven't seen mentioned is the reluctance of the seller to even look at blind offers. 

I just put 2 properties on the market and I put into the ad that I don't accept blind offers. We only showed the properties with appointment and with prior proof of funds. 

Both got under contract within a few days. These were both properties for investors, not retail buyers.

I got one blind offer and didn't take it seriously and didn't bother countering or responding in any way. 

@Adam Butt Two thoughts:

1.) I never made an offer without visiting a property in-person before I had a PM/agent, etc. that I had a relationship with. Too many variables, too much street by street, technology can’t replicate driving the neighborhood at 2 pm and 2 am (my favorite times).

2.) Post having that relationship, they can tour a property, know what I like/hate, etc. I’ll make an offer but it’s not going to be my highest/best because I have to build in a “buffer” for the what-ifs.

I’m sure I could and would use technology if I had a local agent teaming with me and I wanted to blanket lowball offers. Just throw out trash offers with huge buffers in the hope that someone desperate says “yes”. Then I can mitigate my risk.

I think David Greene wrote an entire book on this very subject 😉.  After reading it, buying OOS is not too different than in your backyard.  Have an A+ team in place and do your due diligence.  Good luck!

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I buy real estate all the time without physically seeing it. As long as you have people you trust on the ground and have checks and balances that’s all that matters

Well, this is where having someone local you trust comes into play. Most of my investor clients are out of state or international and they have never seen the properties they buy.

I take the responsibility of being their eyes on the ground very seriously and will not let them buy a property that I don't feel good about. I've blown up several deals after something came up in the inspection and the seller wouldn't negotiate a lower price. And this has cost me thousands of dollars in commissions :(.

@Fred how do you source your International clients and/or how do they get viability of who you are and what you do?

Adam

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