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Updated about 10 years ago on . Most recent reply

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99
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50
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Andrew C.
  • Investor
  • Forest Hills, NY
50
Votes |
99
Posts

Precautions to take when investing out-of-state and sight unseen?

Andrew C.
  • Investor
  • Forest Hills, NY
Posted

I am very new to real estate investing but have been diligently reading everything that I can here on BiggerPockets.  One thing that is holding me back is that I live in a high cost of living area so I've concluded that I'd have to buy out-of-state if I want to cash flow.  I know that you can still do your due diligence when investing out-of-state by going online and checking citydata forum, Zillow, and neighborhoodscout, to determine whether you want to invest there.  Are there any other sites you would use?

Another hang up is that I will likely buy it sight unseen.  I'm not sure if me actually seeing the property holds much value if I'm getting a professional inspector and an appraisal, but I can't help but get a sense of paranoia being that I won't physically see it and that I'd have to trust someone else's word.  Is there any other precautions to take?

One of the areas that I'm looking into is the Kansas City area, and I found a company called investmentscouts dot com (sorry not sure if I'm supposed to post links) and they appear to be an independent third-party which will check out the property giving you an overview of the condition and/or make sure the contractors are doing as they say (if you are rehabbing).  Has anyone heard of them and is their service something that is worthwhile?

Thanks!

Most Popular Reply

User Stats

535
Posts
253
Votes
Kimberly T.
  • Investor
  • Colorado Springs CO
253
Votes |
535
Posts
Kimberly T.
  • Investor
  • Colorado Springs CO
Replied

No one has an incentive to make sure you're not getting screwed except you.  My husband and I have bought 3 rentals out of state (AZ and CO), and we went and looked at all of them during escrow to check them out ourselves.  An appraisal tells you exactly nothing.  An inspector will give you some info about the condition of some items, but they aren't going to list all of the little deferred maintenance issues that may exist (worn/scratched counter tops, chipped sinks, worn carpet, evidence of prior plumbing leaks in cabinets, etc.).  A lot of that stuff can add up to big bucks for you to take care of, so you definitely want to check out everything yourself.

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