Investing in a property without an inspection

[Francis Bernadel]

Not sure where to start so here's a brief summary of where I am and what I'm doing. 

After realizing my local market was too expensive for me, I switched to a long distance strategy. Found an agent in a market I was interested in (Rochester, NY), got pre-approved and started looking a houses.

Recently, I put in my first ever offer on a home! Got a call the next day informing me I was outbid but it was still exciting and informative as much as it was nerve racking. Many things were learned from the experience. I got to review the offer documents as I signed them off.  Got to see additional information like how old the water tanks and roofing were. My agent was able to educate me on the underwriting in the documents and of current laws that protect me if I was still unsure about the house for any reason and wanted to back out. 

There are many things I can touch on of the experience but the thing that's been on my mind the most was about inspection. Specifically, that in some markets wanting to do an inspection on a potential property will make your offer less of a priority on a sellers list. From what I understood from my agent, if I did want an inspection for a house it would lessen our odds in getting a property (at least in Rochester's market and the type of homes welcoming for first time buyers: turn-key; cosmetic rehabs).

Everything piece of media I've consume tell me to know what kind of condition the property is in. My agent is also showing me homes they believe are a good fit after visiting them. I am putting belief in my agents ability that they can spot issues with a property and not lead me astray but I would also like to assure myself that the property is worth the risk in another way. 

What do investors do in instances were an inspection of a home isn't favorable but also want to lessen their level of risk?  People do buy without inspections but as a new investor and as someone who doesn't live in that market, I would like to hear what the BP community has to say.

[Jaron Walling]

@Francis Bernadel It comes down to experience in the market, walking properties, watching YT videos, and learning to AVOID PITFALLS. Relying on an agent when starting out is great like you mentioned (I did the same), but once you buy and sell a few properties (in various condition) YOU have to learn what to look for. YOU have to get good pictures and video, and determine if an offer makes sense. This is the biggest challenge with OOS or long distance investing. You're gambling on someone else's knowledge if they have it or not. I'd rather have knowledge myself, work with professionals (contractors, agent, lenders, etc.), and then check my numbers.

Like @Caleb Brown said an agent is not an inspector. They will spot bigger issues, but you need finer detail to make offers without an inspection. 

From our experience buying distressed SFH I took the self-educated/sweat equity path to learn what it costs to remodel XYZ. This is not for everyone because it takes time. I had plenty of time when starting out (less now days). I know what termite damage looks like, knob & tube wiring, and I've seen bad remodel jobs. I know what outdated fuse panels look like. Doesn't mean I'm an expert on those things, but I'm growing a knowledge base of COSTS and LABOR to repair it. I keep track in spread sheets and in my head. An agent doesn't have the time to teach you those things. Every deal teaches you a little more. If you want to scale in Rochester you need to get into this position. Ever taking time off work, DIY hustling projects, or walking more properties in person. The more you "remote" invest the harder it it unless you have 10+ deals under your belt, established team, contractor support etc. You're competing with locals who have some of those players. Flip the script and get as local as you can. 

We buy mostly "as-is" listings. You want to solve problems and add value. That's where money is made with REI. Single family to multi-family, doesn't matter. Cheers.