7 Reasons I Can Buy Houses Sight Unseen (& Still Sleep Soundly at Night)

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Have you seen that commercial for Red’s Apple Ale where the person is trying to decide which drink they would like when the red apple comes flying in, hits them in the head, and gives them the idea they need to ask for the Red’s Apple Ale? Well, I just had an apple moment, and I feel a little silly it took me this long to realize it.

As I was reading a new, cool article written by Sterling White on the BP blog, I realized that for many people, this article would appear eye opening, risky, bold, and dangerous.

This was the moment when the apple hit me square in the head.

You see, I buy properties sight unseen, too. In fact, the vast majority of what I buy is sight unseen. These days, it’s very rare if I ever see them. If I were to look back at the last time I saw a property before I bought it, it would have to have been over 5 years ago. And I’m not talking about turnkey properties. I’m talking about often nasty, ugly, gross, outcast, funky, needs-a-complete-rehab-from-head-to-toe type properties.

I’ve done it so often I don’t even really think about it anymore. That’s why this article struck me so soundly. I had quietly assumed everybody does this and it’s not a very big deal. Fact is, it’s no big deal to me, but that doesn’t mean everybody else feels the same.

When I tell people I do this, I pretty much universally encounter the same response:

“I have no idea how you do that! I don’t know, I just need to see the property with my own eyes. I need to drive by it and know it’s there. That’s just me.”

I can’t tell you exactly why this is so important to so many people, just that it is.

I’ve bought so many properties sight unseen that it has become the norm for me, and I am now writing a book for BP where I detail just how I do it. It’s never been a problem for me, and it appears I’ve taken for granted other people may not see it the same way.

I’d like to share a little insight behind the details of the book and introduce you to the idea that you may have been looking at real estate all wrong for a long time.

Opportunity presents itself when the paradigm shifts.

If I may, I’d like to share some reasons why there is very little value, if any, in seeing a property “with your own eyes.” I’d also like to share why I don’t need to, as well as why you may already be practicing this principle in a thousand other areas of your life without realizing about it. What sounds crazy at first quickly begins to sound silly when you look deep into it.

I’m pretty confident after this article some of your irrational fears and pre-conceived investing notions may get rocked a bit. 😉

And now, 7 reasons why you don’t need to see a house before you buy it.

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1. Most of us aren’t appraisers or inspectors anyway.

This one is obvious, but for some reason people have a really hard time admitting it. Fact check, people. When the vast majority of us walk through a house, we don’t really know what we’re looking at. Not much, at least.

Now, of course some of us are more skilled or experienced than others. And most of us can spot mold, loose carpeting, bad tile work, a leaky faucet, etc. However, let me ask you — if you can see it, don’t you think the expert can see it just as easily? In fact, do you really think you are MORE likely to see it than the home inspector? And if you aren’t getting your home inspected, what the heck are you thinking in the first place!?

Hey, I know it is second nature to lift up the hood of the car and look at the engine when you’re buying one. We all do it. Especially if a girl is watching. But really, do you know what you’re looking at when you do? I sure don’t. And if you do, do you know enough to look at the deck or roof or bathroom and estimate the rehab costs in your head? And if so, do you really need to be there looking at it yourself to do that? I can do it just from looking at pictures, and I’m not afraid to admit it.

The truth is, there are so many checks and balances to a real estate transaction that you are going to get more information than you’re realistically going to look at. How many people do you think read Natural Hazard Disclosures from front to back? How many even know they are getting one?

Related: 5 Items Investors Overlook When Performing Due Diligence

Walking through a home to “check it out” is pretty much a useless practice and primarily done for emotional purposes. Your agent can walk the home for you. So can your propery manager or contractor. You wanting to do it serves very little realistic benefit to your business.

2. Homes don’t get sucked up and carried away by aliens.

But, David, it just makes me feel better to see the it and know the house is really there!

I know. It does. It’s a little weird committing this much money to something you haven’t even seen. But so what? What in real estate investing doesn’t feel scary when you first do it? Not knowing if your tenants will pay rent, not knowing if you’ll ever find a tenant, not knowing if a hurricane will suck your house up or if it will be used as a meth lab are all really scary thoughts at first.

But you get over them pretty quick when none of that happens, right? Soon enough, you realize there is a reason people are buying houses all over the country, renting them out, and the world keeps spinning anyway.

Of all the things I’m worried about when investing out of state, or investing in general, the house not actually existing is not one of them. Let me tell you why.

The lender sends an appraiser who has to find the actual house in order to appraise it.

If I’m not using a lender, an inspector still has to go by to find the actual house to inspect it. What’s more, he/she takes pictures of said house and includes them in the report. That would be tough to fake.

The title company does a lot of research to actually verify the house is indeed there, amongst other things.

Google Earth is now a thing. Tough to fool Google Earth.

My real estate agent goes and takes a video of the house and sends it to me. He/she isn’t smart enough to Photoshop the entire thing just to get a commission out of me when they could easily sell me some other house that actually exists for much less work.

My contractor would have to be a part of this elaborate ruse to sell me a home that doesn’t exist and it would be tough for him to make money charging me to fix drywall when no drywall exits. It would also be foolish of him to lose my next 10 deals to try and fool me on one.

Zillow, Trulia, and Realtor.com are now also things and can also verify that the house wasn’t sucked into an alien spaceship and disappeared before you closed!

joint-venture-agreement

3. Emotional investing is bad investing.

When you’re looking to buy the perfect house to raise your family, you want to see it yourself. One hundred percent for sure. The floor plan, the way the neighbors look, the color of the walls, where the TV will go. You want to make sure the house will work for your very specific, very unique, very custom needs. You want to feel in love with your house. I’m an agent. I help people do this all the time.

When you are buying a rental property, it’s different. The very last thing you want is to fall in love with it. Trust me.

Emotions make people do some weird, often dumb things. They can skew our decision-making and lead us in ways we know we shouldn’t have gone. When I talk to people about investments that went sideways and how it happened, I can inevitably tie it to an emotional connection they felt with the property. That connection served to connect them to the anchor that took them down to the bottom of the sea. Their mind could tell them to cut ties, but their heart just couldn’t bring them to use the knife. It’s not a positive thing to have an emotional connection to a rental property.

When I go look at a house, the odds of me really liking or really disliking it increase. They increase a lot. I may hate a specific floor plan because it reminds me of the house of an old friend whose mom was always mean to me. Or I may love a certain floor plan because it reminds me of Christmas at my grandparents’. Whatever my emotional response is, it’s likely not going to be objective and therefore not likely to be helpful.

I don’t want to feel an emotional connection to a rental property. I want to sell that sucker ASAP if I feel things going bad, and I want to keep it and ride that wave all the way to the top if I think prices are going to keep rising. I don’t want my own emotional bias to influence my business decisions. I know myself well enough to know that my emotions don’t often serve me well in business, and I respect that.

By NOT seeing a house and instead relying on the opinions of others, I decrease my odds of forming an unhealthy relationship to my business interests.

My real estate agent knows what floor plans tenants/buyers like. Her opinion matters much more to me than my own would.

My contractor knows what walls should come down, what the kitchen should look like, and how much money I need to redo the backyard and stay on budget. He knows the color of paint people like and the style of showers that make sense. His opinion matters more to me than designing a bathroom the same way the one in my own house looks because, of course, that’s the best.

My handyman knows what he can fix cheaply and what isn’t worth the time. My own preference shouldn’t influence this business decision.

Related: Home Inspections Can Save You Thousands: Here’s How to Get the Most Out of Yours

My property manager knows if a second garage space would be worth more than converting it into a fourth bedroom. They know the area better than me. Whether or not I think two car garages are more valuable really doesn’t matter compared to what my PM thinks.

See what I’m getting at? Forming an emotional connection is unhealthy, foolish, and potentially dangerous. You need to know your numbers. You don’t need to know what kind of drapes the master bedroom has.

4. You should be working on your business, not in your business.

My, oh my. We as investors make this mistake. All. The. Time. While it can be fun to go change doorknobs, cut grass, or relight pilot lights, is it really the best use of your time?

Many people manage their own properties because they have no other option. I commend them for that.

Many people manage their own properties because they paid too much and have no choice. I sympathize with them over that.

Many people manage their own properties because they are too emotionally weak to let go and let someone else trust them. I am perplexed with them over that.

I invest in real estate to build wealth and make money. Not to give myself something to do, not to feel “needed” because my phone rings and I am so important I have to go save the day so my tenants don’t suffer, and certainly not to learn how to swing a hammer better. I do it because it’s an awesome wealth building vehicle. You know what else is an awesome wealth building vehicle? My job! Collecting rent is cool. Collecting rent while you also collect a paycheck is cooler.

Don’t forget why you’re doing this in the first place.

I seriously doubt the very best use of your time is putting the sliding glass door back on the rails when the tenant knocks it off. If it is, why not learn a way to make money yourself and hire a handyman for these things? Handymen need work, too! Think of the poor handyman and stop taking all his work. Go send some more direct mail letters, network some more, get a job, get a better job, or reread some of my blog posts. But don’t keep stealing a handyman’s work as if you’re doing something noble. Handymen all over the world are nodding in approval as they read this.

Work on your business, from above. See the big picture and do what only you can do. Don’t work in your business from below. There are other people better suited for that.

buying-investment-property

5. You’re already not looking at your investments in everything else.

So you just feel like you really need to see that house before you buy it, right? Well, did you drive to Cupertino to check out the Apple HQ before buying its stock? Did you meet the CEO of Ford before buying your car? Did you drive to the lot in Nebraska to see that the truck actually existed before ordering it from the dealership?

None of us is driving to the eBay warehouse to make sure that furniture exists before we order it. You are already not seeing things before you buy them all the time. When it’s something as expensive as a house, for some reason, we get all freaked out and weird.

Let me ask you, that bank that is lending you the money — do you think they aren’t pretty dang confident a property exits before funding hundreds of thousands of dollars into escrow?

You’re kidding yourself if you think little old you is going to prevent disaster by driving by a house to see it before you buy it. Don’t worry, people are taking care of it.

You never met Josh Dorkin or Brandon Turner, yet you listen to their podcast religiously (if you don’t, you should) and trust what they say. You never met me, but you’re reading this article. You never met Michael Jackson, but you trust that he sings “Beat It.” It’s totally OK to buy a house without seeing it. You need to do your due diligence. Seeing a house with your eyes does not need to be part of that.

6. You aren’t buying a house. You’re buying an income stream.

When buying investment property, it’s not the same as buying a home. You are buying an income stream. In essence, you are buying an asset (mostly with someone else’s money — the bank’s) in order to have the right to collect the income stream that asset produces (in this instance, the rent). That income stream is produced by the house itself sure, but the house isn’t what I care about. The rent is. I’m not going to go take bricks for the chimney for my own house, so I don’t need to see what they look like. I’m not going to take wood from the deck to rebuild my shed so I don’t need to smell it myself.

I want to know that this property will produce X amount of rent. I can look into that and verify whatever I need to without actually seeing the property. I buy almost everything I own without ever having seen it once. How do I know it exists? Because that rent just keeps coming in. Because the title company sends me a deed of trust. Because I keep getting pesky property tax bills from the county. Because the insurance sales guy sends someone buy to take a picture!

I bought the property to collect the cash flow from it, period. I bought in certain areas, certain neighborhoods, certain home styles, and certain states because I thought I could get a stronger, more consistent income stream. At its core, that’s what real estate investing is. It’s that simple.

All this talk, all these blog posts, all these podcasts, and all this wisdom is really nothing more than people explaining how they found properties that work this way and what they do to not lose money while doing it. Pretty simple when you think about it.

Once you realize that’s what you’re doing with real estate, it gets much easier to not care what the house looks like as much as what it’s worth, where it’s at, and what it produces.

7. You should focus on making money, not looking at stuff.

This one is pretty straightforward. Looking at a home is not making you money! Sure, one way to do it is to go check it out. If it’s nearby, why not? But if it’s not nearby, you don’t need to see it. Other people can do that and can do it just as good or better than you.

Related: Why It’s About to Become a LOT Easier to Invest From Afar in the Next 5-10 Years

Focus on what you’re good at. Not what makes you feel more comfortable. You’ll make more money that way. You’ll grow more that way. You’ll become more productive that way. You’ll end up a happier and more well rounded person that way.

The fact is, if you get really honest with yourself about why you would like to see a house before you buy it, it’s very hard to justify how you looking at it makes any difference in whether or not the place was a good buy. As real estate investors, we have all heard the stories of people too scared to invest in real estate because they don’t want a bad tenant, don’t want to fix toilets, or know someone who lost money in it. They use this fear as an excuse not to get involved, and they prefer to hold onto this fear rather than really question if their fears are legit and warranted.

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You know why? Because they don’t want to find out that they are wrong. They would have to question their assumptions and possibly look at things differently. Hmmm…

Were they to ask you how you invest knowing what could go wrong, they would likely find that all their fears have a solution that you’ve come up with and the risk is really mitigated much more than they would have thought.

Buying a house sight unseen works the same way. Don’t hold onto baseless fears without challenging their validity. Technology has grown leaps and bounds, and it now takes so much of the risk that out-of-state investing once carried right out of the equation.

I have flipped homes in different states. I have rehabbed and kept homes in other states. I have put houses in contract, looked closer, and pulled out in other states. If you understand the process and the fundamentals, it doesn’t matter where the property is. This is investing. The numbers are what matter. Just the numbers.

Everything else is just tricks and tips we’ve learned over the years to make the numbers work better.

I challenge you to ask yourself what the real reason you would be concerned to buy a house site unseen is — and if that reason is worth the weight you give it.

Do you invest sight unseen? Why or why not?

Let me know your thoughts with a comment!

About Author

David Greene

David is a real estate investor/agent/author/entrepreneur/police officer in the CA SF Bay Area. David's goal is to achieve total financial independence through real estate and to help as many others do so as possible. When not hunting bad guys, he hunts deals and loves talking real estate. To learn more about David, visit his website where you can also sign into his free investor's newsletter and follow along as he walks you through his deals and shares his latest projects.

28 Comments

  1. Christopher Smith

    Very Interesting.

    I did my first sight unseen purchase in June of this year. In fact there is a good chance I will never see it (I live in CA, the property is in OH). Worked out incredibly well, but I did have some advantages since I had lived there before moving to CA and already had rental property infrastructure in place (e.g., property manager/agent, insurance guy, solid knowledge of the area’s growth, income and expense profiles).

    The property itself was effectively a special turnkey situation (fully rental ready on day 1). Its an upper end property (3&3) in a top shelf relatively new and affluent neighborhood. The folks selling originally had a much higher offer, but it fell through and they were left with the prospects of having two large mortgages on the completion of their new home (in the very same neighborhood). Left a really nice opening for a timely cash bid about 20K+ below market for a property just a few years old and already inspected with all repairs made (weren’t many really) per request of the earlier failed bidder.

    Rental rate is great for a relatively high end property and costs in that area are pretty darn low (significantly lower than my rental properties in CA). Its already appreciated about 10K (not including the 20K under market acquisition price) and has had a tenant in place from day 1 with a 2 year lease. This actually turned out to be a great deal all across the board – and all sight unseen. Just wish I could come across more like this one.

  2. Nick B.

    David, you’ve made quite a few compelling arguments for buying a house site unseen but I have a couple of questions:

    I was told more than once by a listing agent that a seller would not considere a blind offer. They insist for a buyer to see a property first.
    How do you deal with that situation?

    One of the BP sages, Ben Leybovich, says that you should only buy a house you would be willing to live in. If one follows his advice, how can one buy something site unseen?

    Thank you
    Nick

      • David Greene

        I would agree with Ben on that point. If you leave your tenant with a disrespectful living situation because they are too vulnerable to do anything about it, don’t be surprised if they disrespectfully stop paying rent and make you get an eviction because you are too vulnerable to stop them.

    • David Greene

      Hey Nick,

      First off, thanks for asking! I love these questions.

      1. Regarding blind offers, that was more than likely a situation specific to that home. If you’re talking about a primary residence likely to receive multiple offers, it’s true a seller wouldn’t want a blind offer. They want to know you’re serious.
      If you’re talking about investment property however, the seller knows an investor isn’t likely to care about seeing the property because they are buying an income stream, not a place to live. Your inspections will be much more important to your decision to close than the way you feel when you see the house.

      I have literally never had even one seller mention, or care, that it was a “blind” offer.

      2. I’ve heard Ben say that. To be fair, it’s not a terrible concept. It’s a good way to make sure you don’t have trouble renting the place out. For what I do, it’s an unnecessary extra step. I wouldn’t live in a lot of places that others wouldn’t mind at all. Ben also believes you can’t afford to let someone else manage your property. My belief is you shouldn’t ever be managing your own property.
      What it boils down to is Ben’s purpose for RE investing is different than mine, and I’m glad you brought this up because it’s good for everyone to see. We all need to decide what we want to accomplish through RE investing, then set our business up to accomplish that.

      If I’m not mistaken, Ben lives off his cash flow. He also has smallermargins for error because he chose RE due to it’s ability to help him provide a living for his family. I’ve never talked to Ben, but I’m pretty sure this means the affect of ending up with a property that causes him trouble is much more detrimental to his overall goal of living off the cash flow than it would be for me.

      The properties I buy make money that gets reinvested back into my investing-whether it be through paying down the mortgages faster or reinvesting the capital in new properties. If I end up with a problem property, it doesn’t really do much other than slow me down a little. If the 9 properties I bought that I would never live in do fine but 1 doesn’t, it’s still a major win for me, and the risk of a bad egg is mitigated by the success of all the good ones. I make sure I have enough income coming in to ensure a bad property doesn’t bring me down.

      For me it would be foolish to pass up on certain opportunities because the lost potential value is greater than the possible risk incurred. For Ben, that risk might be just too great for him to be able to justify. Our different goals reflect different strategies and rules we go by to protect ourselves. If someone reading our articles tries to copy our models without understanding our situations, it won’t work out. It’s not a one size fits all.

      There is so much to say about this. I haven’t even mentioned the fact that as you buy more properties, your influence and knowledge grows allowing you to get even better deals the next time. This exponential growth isn’t referred to often because most investors focus more on protecting against risk than in accelerating growth.

      Short story is, you have to ask yourself how much risk you can comfortably afford and then push yourself right up to that limit. When you reach that limit, ask yourself how you can earn or save more money to allow you to be more comfortable with more risk.

  3. Katie Rogers

    I can agree with several aspects of what you wrote, but I just dealt with a situation on a rental I wanted to buy. Personally, I like to accompany the home inspector and listen to his stream of consciousness thoughts. You get a lot of important information that sometimes does not make it to the actual report. Same with the pest report. For example, in this particular situation the home inspector found an ongoing active leak in one of the bathrooms and suspected there was probably water damage in the contiguous bedroom. His said the leak is not evident at first because the seller, instead of actually fixing the leak, covered it up. The report said there was water damage in the bathroom, but did not mention it was still leaking, and did not mention that the damage might be extensive.

    However, armed with the information of a cover-up instead of a proper repair, I told the pest inspector I was especially interested if he found other evidence of shoddy repairs and cover-ups. Indeed, he found seven examples, none of which were included in the pest report. The seller was surprised that I knew so much more about the house than the reports indicated, but still refused to renegotiate the deal based on the much larger repair cost than we originally penciled out. So the deal fell through. My agent thinks the seller should have negotiated with me because I actually offered more generous terms than she is likely to get after the next buyer sees the reports. Maybe the seller will come back to me when the next deal fails to close. I could have ended up with a serious money pit if I had not attended the inspections.

    • David Greene

      Hi Katie,

      You do bring up some good points. My biggest concern would be why your inspector didn’t note that stuff in the report. I always call the home inspector and talk to them on the phone while we go over there inspection report. I also ask for the vibe they got of the property and what their biggest areas of concern were.

      I think you brought up a great point that many readers should see. When it comes to RE:

      Water=Bad

      Water damages houses in many ways. Anytime you find water, you need to first find where it came from. It doesn’t get there by itself. Water is a big cause of concern in any inspection report and my inspector would know he needs to track down where it came from because I’ll be asking!

      Glad to hear you caught that one. Nice job.

    • Ryan Sanders

      As David said, I would be EXTREMELY concerned with an inspector that furnished an incomplete report. In both cases (home inspector and pest guy), they left things out of their reports that should have been there. I would be looking for new companies to work with.

        • David Greene

          Hey Katie,

          If your untrained eye is finding problems that a home inspectors isn’t, you’ve got the wrong inspector. These guys find dirt on a baseboard sometimes. They are extremely thorough. If you find someone with a good reputation it shouldn’t be too difficult. I think you just found a not so great inspector. Odds are next time they’ll be much better.

        • Katie Rogers

          I think you are still missing my point. It was not that I saw things the inspector missed. I didn’t. The point is I benefited from listening to his comments and asking questions as he went about his work. Inspection reports describe what is. They usually do not put forth opinions about why a certain situation came about. Inspectors only have to report what is basically in plain sight. Their reports usually do not speculate about damage that might not be in plain sight. This is what I mean by “incomplete.”

  4. David Roberts

    I think the article is somersesomewhat disingenuous. The author appears to have a trusted team that looks at his houses for him. So someone looks. Someone Knows the city inspectors, someone knows the small crap they will flag that adds up to 2k in repairs you may have missed and turned your deal less intriguing.

    Property management is expensive. Usually 8-10% but more like 12-15% with fees added in for finding tenants. Cap ex is deadly. I’m a big believer in what Ben says about that.

    The numbers for prop management seem less of a problem if you buy houses that are 20k put 10 in and rent for 800. More of an issue if you buy in better locations at say 50 to 60, put 25 in and worth 115k. Taking 75% cash out, prop management eats into your return.

    But i understand the reason for it. Working On instead of in is a great thing. WE have found that by putting in all the improvements up front it really makes for an almost hands off investment for many years.

    Just my thoughts.

    • David Greene

      Hi David, thank you for your thoughts.

      I do have a team, but it’s a team I built. Anyone can do the same thing. If you aren’t afraid to kiss a few frogs, you can find great team members.

      As far as city inspectors, your contractor should be very familiar with that process. If your contractor doesn’t know how to handle the permit and inspection situation, you hired the wrong contractor. In all honesty, that isn’t a hard thing to find. Hiring one who can’t handle that process is like hiring an attorney who doesn’t know how to file court paperwork.

      Regarding your concerns about 2k in extra repairs turning your deal less intriguing, I think all I can say about that is if 2k ruins the deal, it wasn’t really a deal. It was just a purchase.

      I pay between 6-8% for property management, depending which state it’s in. I use my property managers for a lot more than just collecting rent so I don’t mind what I pay them at all. In fact, I would happily pay more for property management. Those guys have a rough job.

      When it comes to paying for property management, once again I would say that if the property does not support itself covering property management, either you’re paying too much or you should be flipping it. I’ve never had a hard time finding properties that covered their own property management. I wouldn’t buy a business if I couldn’t afford to hire managers to run it. That’s not an investment, that’s a job. I look at RE investing the same way.

      As a side note, if you’re taking 75% out, you should be getting almost all of your money back out (if you bought right). Considering you don’t have much cash left in the deal, your expectations for your returns should be adjusted.

      I understand maybe your experiences have been different, but I can only write from what my experiences are. This is exactly what I do and what I’ve done for years and I haven’t had any problems with it yet.

      • David Roberts

        Hi Dave thanks for the response.

        I try to be all in at 75% but sometimes that doesn’t always work out. Its not a perfect world but the Internet is filled with 99% good stories which leads people to think it is almost always rosy. It isn’t.

        It is far more impressive to build a great team. GOod for you. BAttle scars!

        All of our deals factor in property management anyway and with money all out i like to be cash flowing 300 including prop management. At Some point like you said, if your time isn’t worth the stress of worrying about your rentals, then it makes sense.
        My point was after we put the cap ex all in up front, the investments are hands off and we get the best tenants with the nice remodels. But I am sure after we run into a few major problems that will change, which is why we factor in the management up front.

        We do not invest put of state either at the moment. Can’t Manage from afar, so have to have a team.

        • Katie Rogers

          I read your comment as making the point that he is not really buying property sight unseen. Someone is going out and looking at the property on his behalf and reporting back to him. Truly buying sight unseen is risky. I did it once twenty years ago, (80 acres with mineral and timber rights) and did not get to see the property until 4 years after purchase. It turned out to be a beautiful property. The original seller’s listing completely neglected to mention some of the properties best features. I am about to close a sale of this property at a great profit. I was lucky.

  5. I think your article is completely genuine, accurate and completely truthful and honest. I bought my first “unseen” rental in 1985, and have been doing it ever since. I have written Forum Responses that are almost identical to this blog. Having first earned my Real Estate License in 1982, I cannot tell you how many times EMOTIONS have gotten in the way of good investing. I currently own property in 7 different states. I saw NONE of them before I bought them with the exception of a duplex in Colorado that circumstances aloud me to inspect before I purchased.

    Just last month, my wife and I flew to St. Louis, MO for a convention and we had just purchased two rentals in Kansas City. So we decided to take a day and drive over and look at them. Between Airlines, Hotel, Car Rental, Food and other expenses, it cost us around $4,000.00 for the trip. If we were to fly to every potential investment, we could drop $30,000 to $50,000 on travel before buying a single investment. Before purchasing those two in Kansas City, I looked at hundreds of properties online, can you imagine if I had to fly to every one of those all across the country!? I have yet to see anyone, ANYONE, including Ben, whom I agree with and like a lot, put down TRAVEL EXPENSES when showing returns on a property. Property Management is CHEAP compared to the alternative, TRAVEL. Besides, no one really manages their own property, they just like to say they do.

    Let me update a quote from the article, “My job! Collecting rent is cool. Collecting rent while you also collect a paycheck is cooler.” and let me add, “Collecting Rent while you are sitting in a 2,500 square foot State Room on Oceania Cruises, going across the Baltic Sea is THE COOLEST.”

    OWN your Real Estate Business, do NOT let it OWN YOU!!

    • David Greene

      Mike, wow. What an amazing piece of value you just dropped there. I should have had you edit my article before I wrote it.

      You are 100% right. I didn’t include travel expenses because I think I subconsciously assumed everyone already knows that. I was wrong, many probably don’t. It does NOT make much financial sense to travel to see SFR’s. If I was buying large MF that would be different.

      Here’s something else I didn’t mention for anyone reading this. Mike brings up a potential 4k in travel expenses just to see a property. What he didn’t include was opportunity cost. The money you lose taking time off from your job to see a property needs to be included too. So does the vacation time you have to burn and the lost time looking at other properties online.

      Seeing a property first is a luxury that is primarily emotional. For people new to investing, I can understand why they would want to see it first. I’m sure the first time you try out a self driving car you will keep your foot hovering over the break the whole time. But for people who have developed a system to buy properties out of state with other people doing the work for them, they can sit back and relax while the car drives itself.

      Thank you for pointing that out Mike!

  6. Robyn J.

    I totally get it. We buy & sell real estate notes – performing & non-performing. We don’t have the authority to go ‘inspect’ the house, vacant or not. I have a vacant property in FT Wayne for sale & 5 loaded rentals in Ohio for sale. I don’t expect the end investor to look at any of these properties; like David said the deal is based on the numbers & not the color of the carpet. Sure you need to know how much to budget for any rehab but with some pictures you should be able to figure it out. If your an investor in another state it can get very expensive to continue to fly around the country looking at potential deals.

  7. Ndy Onyido

    David,
    This is a splendid submission. There are independent parties involved in RE process and with improvement in technology, quite a chunk of the due diligence could be done online. With inspections and appraisals, coupled with the title and closing companies, I will expect that all loop holes and closed with all the checks and balances.

    I bought my first property unseen; although I had issues with the property, it had nothing with buying sight unseen and living in Canada and investing in the US, if I choose to sight each property i buy, I will end up globetrotting and leaving the real thing behind-minding and growing my business.

    Thanks again for sharing this beautiful piece.

  8. Justin Harford

    Hi David.

    I am an aspiring blind investor in Eugene Oregon, and one of my biggest fears was the trouble that I might have as a blind investor in the real estate world. I have congenital glaucoma, so I’m not speaking metaphorically. As I am purchasing my first investment/residence, a duplex, your words encourage and resonate with me, as I have found myself leaning quite heavily on the expertise of the realtor, my friend who is a home insurance professional, the inspector, the mortgage broker and others. I think even if I had 2020 vision, I would still need the support of others to be successful.

    • David Greene

      Justin, what an amazing commentary. Thank you so much for sharing that. You may have just provided the perfect argument for why you may not need to see a property before buying it. You have to deal with the fact you may not see a property at all.

      And you know what? I bet you make up for that disadvantage by learning to be extra squared away in other areas and put all the rest of our systems to shame.

      Much luck and blessings towards your success my friend.

    • David Greene

      Hey Zach.

      Super abridged version of my system.

      Run the property by my property manager and a 2nd realtor (I pay realtors for this effort).

      Cross check their opinions with primary realtor.

      Send my contractor out to see the property and give me a worst case scenario budget.

      Write my offer based on the worst case scenario.

      Negotiate said offer with seller. During this process my contractor writes me up an itemized proposed bid with much more specifics.

      Buy house knowing pretty well if I’m going to flip it or rent it after seeing contractors bid.

      Real estate deals, even the ones that move fast, don’t always move fast and have inspection periods where you can back out. If you time things right and understand the process, you can get everything you need to get done by having several pieces moving at the same time. Technology has made this so much easier now. I literally do this with several houses at a time and don’t spend much time thinking about it until the deal actually closes and I need to get to work with all the nuisance stuff like putting water in my name, power in my name, scheduling repairs and wiring money, etc.

      Hope that helps!

  9. Josh Lonnquist

    Hello David,
    I am just beginning to dip my toe into real estate investing. I am in the process of purchasing my first two properties with an investment company in Indiana, though I live in Portland Oregon. However I know that going forward I would like to not have to rely on an investment company that holds your hand all the way through the process of aquiring rental properties. What do you recommend as first steps to making the contacts needed, in the area that you are interested in? Should I contact property managers first then find a real estate agent and then a contractor? Or do you suggest another path? You opinion is helpful to me, even through I’ve never met you. 😉 Great article!

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