Investing out of state sight unseen

BRRRR - Buy, Rehab, Rent, Refinance, Repeat

Investing out of state sight unseen

Investor · NY · Member since 2022 · 42 posts · 31 votes

Hi, I am NY-based looking for purchase a long term/BRRR in Cleveland, and want to hear your experience with out of state investing.

Are most out of state investors closing on properties without doing physical walkthroughs? Same with rehab, are you rehabbing properties without physically being on-site to oversee the process? This feels risky to me, but this is my first purchase so would love to hear how you've handled an out of state investment. Thanks!

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Luka Milicevic

Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes

I work with out of state investors. Probably 90% of my clients have never walked a house before buying it.

I do virtual walk through tours for them.

The absolute most important thing you have to do is have RELIABLE boots on the ground. Someone you can absolutely trust and rely on at all times.

For all my clients, I am that person. I can recommend contractors, inspectors, provide feedback, check on the property, etc.

Interview several agents if you are going that route and make sure the person you end up working with will be your "go-to" person when you need them.

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Tommy Parker
Property Manager · Charlotte, NC · Member since 2022 · 269 posts · 135 votes
3y
Agree with most on here about getting someone you trust to do a Facetime or video for you on the property.
2 Reply
Jason R.
Investor · Denver · Member since 2018 · 16 posts · 13 votes
3y
I used this site to buy almost a year ago in FL. I found a great realtor and broker + PM who helped me quite a bit. I also have a friend who lives about half an hour away that asked to check the place out. After a few videos and personal opinions of the place, I decided to pull the trigger and buy the place. So far, its been doing really well as a LTR and is VERY profitable. Best of luck to you!
3 Reply
Jay ThomasPro Member
Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
3y
Buying out of state can help you get the best bang for your buck, but it's important to take the necessary precautions. Don't settle for buying a property sight unseen - make sure someone you trust visits it in person and records a video so that you can ask questions. It's worth taking the time to fly into your desired area for a long weekend and really look at what's available. Finding a great realtor who understands your needs will also ensure that you have plenty of properties to choose from and that they are willing to spend adequate time with you to ensure an informed decision. Ultimately, the cost of a flight and hotel room are well worth it in the long run!

[email protected]832-889-5607
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Jack Mawer
Lender · Member since 2022 · 338 posts · 374 votes
3y
I would be careful buying sight unseen, I would encourage you to at least visit and scope out properties and their respective neighborhoods- as Steve mentioned, make sure you have a group of people in the Cleveland area that you can rely on and trust to send you updates along the way
4 Reply
Olivia Grabka
Property Manager · Leominster, MA · Member since 2022 · 103 posts · 50 votes
3y
@Molly Paprota
Massachusetts is really competitive, Suffolk & Middlesex Counties are top 10 markets nationally. Extremely hard to find deals and the deals are expensive. Given this set of circumstances we started building our business by going further west into Franklin County. It was less competitive and a lot cheaper, but still within driving distance. It was much easier to learn the market & we had less anxiety about making a mistake based on someone else's judgment; Agent's and Buyers do NOT share interests. As an Agent the task is short sighted, as a Buyer the task is long term, this creates a natural discrepancy. The only time an Agent's interest arw fully aligned with an investor is when the Agent does draws significant income consistently from them.
Long & short there are fundamental disadvantages you are facing here. Instead of going out of state go to a different part of your home state. Decrease the degree of difficulty and increase your likelihood of success.
I hope this helps.
3 Reply
Jewel B.Pro Member
New to Real Estate · Lehigh Valley, PA · Member since 2021 · 352 posts · 121 votes
3y
Make sure to have a great team in place.
If you're working with professionals, what do you realistically have to add to the experience by physically going in person to see it? It's an emotional comfort but not necessary when working with a great team.
2 Reply
Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
I flip property sight unseen, but I've also walked 100's of properties. Don't buy sight unseen without the experience and a solid team.
2 Reply
Jennifer J. Schilling
Rental Property Investor · Spokane, WA · Member since 2022 · 15 posts · 35 votes
3y
@Molly Paprota read David Greene's book "Long Distance Investing" it tells you exactly how to do it, while minimizing risks. Good luck!
4 Reply
Frank Greg
Lender · rate.bid · Member since 2022 · 324 posts · 62 votes
3y
@Molly Paprota:

Are most out of state investors closing on properties without doing physical walkthroughs? Same with rehab, are you rehabbing properties without physically being on-site to oversee the process? This feels risky to me...

If you were buying a zombie house for rehab purposes, some can be quite unsafe structures that you typically are not walking through it yourself regardless of if you are in or out of state.
You typically would hire a licensed property inspector who then goes through the property and provides a detailed report with an itemized list of what repairs is required.
The repairs list is also the list you would provide the contractor (or whoever is doing the repairs) to get an itemized repair estimate for the property.
1 Reply
Mike Hasson
Specialist · Columbus, OH · Member since 2019 · 110 posts · 102 votes
3y
I have bought sight unseen.

My Realtor did video calls for walk through, and I definitely got an inspection report.

I am happy with the purchase and am glad I did it!
if I were to do it again, I would have done more research into getting an inspector that understood the needs of an out of state investor, such as providing virtual 360 photos, and zooming out too see where exactly the defects are located, which could be taken for granted when you get to walk through a property.

Another tool that I wish I knew existed was RepairPricer (I'm not affiliated, but I do use and value their services). You can upload an inspection report and they use AI to generate repair estimates for the entire itemized report, with a respectable degree of accuracy.

Fast forward, and I'm actually living in that house now, even though I bought it to eventually rent, I feel that with the help of my realtor and inspector, I made a pretty good choice.

Oh and David Greene's book on long distance investing was a huge help. The point he mentioned that stuck out to me most, was that the need to walk through is based on emotion, but as investors we need to look at facts, which can be be acquired remotely.

My plug is that I am that inspector that understand the needs of long distance investors, uses virtual photos, and I have a seamless integration with RepairPricer!

Btw im not too far from Cleveland, so I'd love to connect and may be able to offer some guidance and support. Even if you go with a different inspector, I love to talk real estate, and to see people living their dreams!

Hope that helps! Good luck!

6 Reply
Ken Maddis
Insurance Agent · Thornton, CO · Member since 2018 · 75 posts · 51 votes
3y
Hi Molly, sight unseen is most definitely doable, even for beginners. My first and only two properties so far were bought unseen.

I didn't see the first property until after I closed and flew down there (and the realtor gave me a tour of the city as well), and I've never seen the 2nd property. The 2nd property has had one renter in 4 years who just renewed her lease with two rate increases. Both have positive cash flow.

As has been mentioned, the key is finding a good team you can trust, realtor, inspector, contractor, lender, property manager. Before I even started I read this book to get me familiar with OOS investing... https://store.biggerpockets.co...

We're in a position to do a couple more properties this year and I have no intention of visiting them since I have people in place that I trust.

So yes, you can absolutely do this!
2 Reply
Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
3y
@Molly Paprota
why not pick a market you can drive to? go to REIA meetings. network with other investors. find an agent. visit dozens of properties. meet PMs and contractors. do the work.

it's much easier to set up your Core 4 and roll your sleeves up 1-4 hours away, than 1-4000 miles away. don't be this person:
https://www.biggerpockets.com/...
1 Reply
Sam McCormackBusiness Member
Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 834 votes
3y
@Molly Paprota
Hi Molly, like most others have said thus far, I recommend getting someone you trust to look at it and/or taking a flight to come see it! Opportunities like this exist in Cincinnati as well if you are interested!
[email protected]859-443-4952
Sam McCormack Realtor
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1 Reply
Molly Paprota
OP
Investor · NY · Member since 2022 · 42 posts · 31 votes
3y
Quote from @Delbert Standifer:

@Molly Paprota
May sound funny but it’s really all about your team. I have to 6 out of state properties. The first 2 I went to go see after my confidence/ experience grew I didn’t feel a need to see every property that I purchased.
That makes sense! I think Id feel most comfortable at least seeing my first one in person. How did you go about finding a solid team?
0 Reply
Delbert Standifer
Rental Property Investor · Carson, CA · Member since 2019 · 185 posts · 74 votes
3y
Networking!!! Slowly!
1 Reply
Henry Lazerow
Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
3y
I broker lots of deals to sight unseen buyers. You need good team, realtor and inspector you trust as well as realtors connection for contractors they trust (very important as your realtors contacts won’t screw you over or they would not get referred out again).
I live video the tour and answer all the questions. It works out fine. None of my california clients tour in person but some did come visit to meet me and drive the areas initially.
2 Reply
Yaseen Khan
Member since 2020 · 5 posts · 1 vote
3y
Quote from @Jason R.:

I used this site to buy almost a year ago in FL. I found a great realtor and broker + PM who helped me quite a bit. I also have a friend who lives about half an hour away that asked to check the place out. After a few videos and personal opinions of the place, I decided to pull the trigger and buy the place. So far, its been doing really well as a LTR and is VERY profitable. Best of luck to you!

Hi Jason, How are you? I am also interested in Florida. Would you be kind enough to share your realtor/broker and PM's contact information with me?
Thank you!
Yaseen
0 Reply
Laura Shinkle
Realtor · Charlotte, NC · Member since 2017 · 359 posts · 293 votes
3y
@Molly Paprota all of my out of state investors close without physically walking through a property. If you have an agent that you can trust, then that's gold and all you need. they should be able to tell you if there's a weird smell or weird layout that you can't see from pictures.
With my clients, I do a video walkthrough, usually 10+ min, and I walk through the home as a renter/someone living there would so you get a feel for the flow. I talk throughout the video about what I'm seeing, condition of the property, any red flags, etc. I also do another video on the outside so you can see the surrounding neighborhood, hear traffic, etc.
The reason I do a video as opposed to Facetime is just simply people's schedules and service. if you or I don't have great service, the Factime video will be blotchy and not great resolution, negating the whole point of the thing. Plus, with a video, you can go back and watch it as many times as you like.
I can't speak to the rehab process since most of my clients buy fairly turnkey properties. The ones that have needed rehab, the property manager has been willing to take the project on and oversee it.
Best of luck!
1 Reply
Joseph Crunkilton
Rental Property Investor · Oregon City, OR · Member since 2020 · 324 posts · 780 votes
3y
Hi Molly,
It's a hurdle and scares off a lot of people from investing out of state. But honestly, how much in person walking around are you going to be doing at your rental? We're not experts, and we trust the experts to give us their informed opinion.
The biggest factor to your OOS success is your team. Good PM's, contractors and agents that can assist. Their word is their reputation, and it can seriously damage business if someone is screwing you around and you go public with it (reviews, word of mouth etc.)
Join FB groups, be active on here and you can find good people to help. I've worked on this in a few markets for the last couple years so if you need some tips or pointers I'm happy to help.
1 Reply
Jayson Cain
Lender · Manhattan Beach, CA · Member since 2017 · 423 posts · 268 votes
3y
Hi @Molly Paprota,

I'm based in Southern California, but I have started my out-of-state real estate journey in Indianapolis. Now, I have a portfolio of Short Term Rentals and Long Term Rentals. I've started looking at Columbus because my business partners have found success doing Mid Term Rentals there and the returns are solid.

I've also helped other investors with their DSCR loans and flip projects in Columbus. Happy to share my experiences and chat with you more if you're interested.

1 Reply
Eric FernwoodBusiness Member
Realtor · Las Vegas, NV · Member since 2014 · 1k+ posts · 1k+ votes
3y
Hello @Molly Paprota,
You are not buying a home. You are buying an income stream. If you work with a qualified local investment team, they will provide all the information you need. Besides, if you saw the property, how would you know if it was a good investment property? My team and I have delivered over 470 investment properties. I could not tell by looking at a property whether it was a good investment. I need my team members to use their respective skills and experience to evaluate any property under consideration. Neither could you. Your local team provides the eyes, ears, and hyperlocal knowledge required to be successful.

Why is a good local investment team imperative?

Everything you learn in seminars, podcasts, books, and on websites is general information. You won't buy a general property in a general location. You will buy a specific property in a specific location, subject to local rental regulations. To maximize your investment dollars, you need hyperlocal information. The only source of hyperlocal information is a local investment team with years of investment experience.

A local investment team also provides proven processes and local resources. The most important team member is the investment realtor.

An investment realtor is not a residential or "investor-friendly" realtor. Residential Realtors send MLS data sheets for the properties you specify, and you do everything else. MLS data sheets contain little or no value to an investor.

Investment Realtors sell income streams, not residences. Investment Realtors understand finance, market trends, return calculations, tenant pools, and more. Investment Realtors also provide a wide range of services, including actionable analytics (not MLS data sheets), property selection and evaluation, processes, practical experience, resources, and more. Plus, Investment Realtors are always part of a team.

Does remote investing work? To date, we’ve delivered over 470 investment properties. >90% of our clients live in other states or countries. I’ve never met 60% of our clients in person. Many have never been to Las Vegas. Are our clients happy with remote investing?

More than 90% of our clients buy two or more properties. Over 80% buy three or more properties. We have the processes in place for remote investors.

What should you expect from your investment team?
- Opinions, advice, and analytics. Not MLS data sheets.
- Training – Direct or indirect.
- A complete solution – Property selection, validation, renovation, and property management.
- Trusted advisors, not salespeople.
- A track record of success working with investors, NOT residential or “investor friendly” realtors.
If you or anyone would like to know how to find and qualify a local investment team, DM me.
[email protected]702-358-8884
FERNWOOD Team, KW VIP Realty520 Reviews
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David Leggett
Real Estate Broker · Cleveland, OH · Member since 2018 · 227 posts · 133 votes
3y
Lots of great comments and info! As a Realtor who specializes in investment properties in the Cleveland market, I've done about 100 sight unseen deals for buyers, who are out of state, or out the country. 99% of the time they were happy with the video calls, or me just sending detailed video walkthroughs of the property. It's important to have a trusted home inspector as well on your team, but I also suggest making connection with local contractors who can do a complete walkthrough and can give you an accurate scope of work so you're not relying on the realtor's assessment since they're not generally experts in repairs and construction costs.

But Cleveland is a great buy and hold market so I know you'll do great and it sounds like you're already off to a great start!
1 Reply
Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
3y
Don't trust anyone without proper documentation!
[email protected]248-209-6824
Logical Property Management4.9462 Reviews
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V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
3y
This is always risky. I intend to do the same as you, but my plan of attack is a bit different.
I'm actually going to visit the cities, get a tour of them with 2-3 different agents/brokers/PMs. Get my taste of them, taste of the city. Then from there, if I trust them, move on with them and buy sight unseen. If I don't feel confident, I don't move on them or the city. If I do, I move heavy.
1 Reply
Alex Acosta
Real Estate Agent · Queens NY · Member since 2018 · 18 posts · 16 votes
3y
Hello Molly i am also from NY , i am pretty familiar with Cleveland done some deals there virtually last several years. I suggest you familiarize yourself with any market that you are new too, connect and speak with as many locals in the real estate industry as you can and ask for referrals . Find a reliable boots on the ground person is important . This will help you learn alot of things that an out of state person wouldn't know . Also doesnt hurt to visit that market for a few days to get a better sense of different neighborhoods .
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