Why do people purchase property outside of their area, especially single family homes?
I can understand better if you are looking at multi-family properties. It makes much more sense because you can better afford a management company or just a property manager to handle the property for you. SFR do not have a lot of margin in them. Therefore, you will be hardpressed to be able to afford having a property manager for a SFR.
I just finished inspecting a property in Cincinnati that I’m thinking about purchasing.
However, I’m a reluctant purchaser for this neighborhood. It’s located in the Evanston area, not exactly the Northern suburbs that I typically focus on.
This was a lead that came in off one of my websites. The caller did not fill out my online form before calling, which is understandable. However, she did fill it out over the weekend after we had spoken.
Since they are looking at shedding this for less than they paid, I figured I would at least take a look.
This couple lives out of the area and they DO NOT want to deal with this property. Bought it from a bank in 2008 and they have NEVER been to the property. Not before buying it, not after buying, not while the work was being done. NEVER!
They turned it over to a “Care Taker” after they bought it and he was supposed to do the repairs and get it rent ready.
Now, I have written about this in the past on other groups, media sites, etc. It’s known as “Virtual Investing”.
Do NOT do this unless you are very experienced. I don’t think these folks were experienced. Their are a bunch of people out there touting virtual RE investing “Systems”.
It may work for some people, but it’s not for most people, and is definitely not something you should try if you are new to the business. You need to be in control of your business. Sorry for ranting.
Back to your regularly scheduled program…
I drove up to the property and the street is actually not too bad. One or two other boarded up properties, but the area is actually likely a good rental area. This is not a quick turn area. You buy for cash flow and plan to hold it for a while.
It won’t appreciate, but if you buy it low enough and keep your fix-up costs low, you will likely do pretty well. This one could probably be turned into a two-family and would most likely make very good sense that way.
With that said, as soon as I pulled up I noticed that there were several broken windows and a few boarded up windows. The house next door has some boarded up windows as well but is in better shape than this one. I also noticed a folded up bundle of papers stuffed into the door.
If you are experienced, you probably already know that those are likely work orders from the city.
So, I step back and start taking some pictures to be able to send to the owner. Then I walk up to the front door. Yep, work orders and the house is condemned! 
No wonder they are motivated! LOL!
The porch is being held up by a skinny stack of cement blocks. I’ll spare you the rest of the details.
However, this could be a really good house to make some decent monthly cash flow on.
This couple made several CRITICAL mistakes. 1. They never saw the property prior to entering into a contract to purchase.
2. They did not see the property before arranging work to be done. (How are they going to know the results if they never saw what it looked like prior).
3. They likely paid their “Caretaker” upfront and never inspected his work.
4. They never made sure it was finished and then rented it.
Well, what did they do right?…
They called me! LOL!
A little late, but I may still be able to help them.
Other than the critical errors the owners made that I noted above, one of my points is, I NEVER would have found this person because I was NOT looking for them.
I do not think they called any other investor. They found my website, called me and I answered the phone. This is an embarassing thing to have happen to someone. If the seller finally get’s the nerve to call someone about their problem, the first person that answer’s the phone is likely going to have a very good shot at that deal. They don’t want to have to call someone else. Now, I have an obligation to try to help that person out or at least let them know rather quickly if there is nothing I can do.
I am not stringing this seller along. I was very upfront with her today after seeing the property and gave her some action steps that she needed to do.
These folks found me because of my web presence.
If you would like to benefit from my web presence, you should get on my wholesale buyer’s list.
One of my site’s has a connection with thousands of investors across the country. If they have something in your neck of the woods, they will alert me and I can then alert you.
Also, I’m dealing with some bulk REO packages that are obviously not all going to be in my area.
I need someone to sell them to. Go to the link below and get signed up.
=====> http://www.Ohio-Homes.net
If you want to hear more about the system I am using or if you need a web presence, let me know. I have several options for you depending on what you are looking for.
This is one option. Yes, that is an affiliate link and my company may get a commission if you decide to buy something from them. It’s a great system though so check it out.
=====> Click here for The Best system available for RE Investors
Also, have you signed up yet for my 2010 Investor Webinar Series? See more info at the link below. Let’s hit 2010 running hard.
=====> http://rapidreiresults.com/wordpress/?p=382
Happy and prosperous investing!
Marshall
P.S. Feel free to leave a comment below.
P.S.S. Are you on Twitter?
=====> Join me http://twitter.com/RapidPropertySo
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