Buying Out of State Properties - On line Website

[justin0419]

4444 has a new name on the website. Welcome back…

[Jafo1]

Awww… does this mean you are no longer interested in my e-bay sale of a fabulous bridge right off of Brooklyn?
http://farm1.static.flickr.com/119/305703300_99fa2ffe8f.jpg?v=0
…the location is amazing and seller financing is available with a small deposit :biggrin…

[BrianA06]

@Seve.707 post:16

@Funder post:15

Due diligence involves way too many things, and it’s getting worse. Any title company can sell you title insurance, and your concerns with title are basically over.
When you read the real estate investment forums and books, I think that you will find mixed opinions about out of state investing. Some find it to be the only way to find desirable gross rent multipliers (rent to selling price ratios), others say that you should start investing where you live.
If you are familiar with an out of state market, that’s great. Are you familiar with the out of state laws? Many laws relevant to property management vary form state to state. I have a recent post called Eminent Domain Abuse, and, as we speak, a property in my area is being seized by the City from a landlord, because the City has a development plan, and they want to negotiate terms with him, or get him out of the way.
In some low income areas, buildings are being condemned and torn down. In this case a piece of property can be a liability instead of an asset (the government can charge you for demolishing a condemned building). These are unusual examples, but you should not be blind to potential problems.
Does the building have mold, asbestos or lead paint? Does it have termites? Does it have dry rot? Does it have fire damage? Does it have aluminum wiring or copper wiring? Does it have Galvanized plumbing or copper plumbing? Does the tenant have a meth lab in the garage? There are many problems that a good property inspector cannot find, or may not tell you about, since they do not think of them as pertinent to the inspection.
I have had other investors tell me that a property that is too long a drive can be a hassle every time a problem comes up. Imagine having to fly to the subject property. It might not ever come up, but it might, especially if you are a new investor.
Some gurus will say that you should not hire a property manager until you have managed the property yourself.
Go ahead and buy an investment property that you think has a lot of potential, but do not underestimate the amount of time that you must spend researching all aspects of the deal. All of your offers should have contingencies that will let you out of the deal (and have your earnest money refunded) if you find something that you don‘t like, especially in this market.

Bingo!!! Excellent advise. I appreciate your honest opinion. Yes, I am familiar that each state has their own interpretation of law with regards to applying “Eminent Domain” to an existing neighborhood (ie: in Connecticut area). However, I could have easily neglect that as part of my guideline in pursuing out-of-state investment. Another example: State declared condem properties while I am very much aware of it – was not in my written guideline.

But, more importantly, the other check/punch lists that you mentioned above, also, were not in my mind nor I would have been looking for - such as, the importance between aluminum or copper wirings and galvanized or copper plumbing. That’s the main reason why I asked and open this thead. Your opinion and advise are well taken.

Thank you once again.

Seve.707

I am new also, and I have a Due Diligence list that is like a book. It is a combination of things that I read about, asked about, and ideas I got from realtors and others in the industry. Depending on where in the country the property is located, you may have to change things on your due diligence list. Ex, gutters, ice buildup, termites, other pests, flooding, etc. And having it inspected is one thing, but also inspecting it yourself is good because you can see what you want to update or fix to improve the value for yourself.

I am in NJ, and do not want to buy rentals here because the laws are in favor of the tenant and it could take 6 months to get them out. In NC, where I am buying, it is 1 month. And I will walk through each and every unit during the Due Diligence period. I know if I skip 1, that is going to be the one with the 15 cats, and 7 dogs, leaking sink, and broken toilet.

[Lamar]

Geez! This is a degrading thread. lol However, I know it’s all in fun.

Anyway, I don’t see any problem with buying properties over the internet. Many people have to do this when relocating.

However, as Funder said you need to do your educate yourself on the subject property, the market, and the laws of that particular state. How do you do that from out of state. Well, I would definitely request upt to date pictures from the seller and I’d also get the property inspected. I’d also talk to some Realtors/other investors in the area, as well to get a feel for the market. I’d even go as far as speaking to attorneys, if the deal was worth it to find out about the laws. Properly educating yourself on an investment will help you make a sound decision.

I sell properties online and I don’t look to take advantage of uneducated newbies or naive individuals. What would that do for my reputation. However, I do tell them that they need to make an educated decision on their own and not rely 100% on the information and facts that I am presenting to them. Therefore, when they realize they’ve made a decision they can live with, I get a nice testimonial or referral.

I’ll put it like this… There will be a bunch of mixed reviews about investing out of state and investing local, but both methods are effective and can put alot of $$ in your pocket if you know what you’re doing.

I’ve seen investors get stung for investing out of state and I’ve seen investor get stung for investing local, in their own market. In the end, it will come down to your knowledge of the deal, the market, and the laws that govern that state that will dictate your success. That’s just my 2 cents!

[j1dias]

Buying property without seeing it… I don’t know. I wouldn’t do it. Even after talking with local people. What’s next? Marrying someone that you met in a discussion forum but never met in person?

And don’t forget that there are laws about selling stuff on the internet, which also apply to real estate. Do you know that if you buy property that you haven’t seen you have a period to back out of the deal? I don’t like this possibility. I understand that you can use the Internet to market your properties, but if there is someone interested I would insist that he/she come down to take a look at the property in person.

Just my thoughts… Have a great day!