Investing out of state unseen

[Jason Malabute]

When you guys are investing in Indianapolis from out of state. How do you guys make sure your agent doesn’t miss anything (possible small repairs (not going to be detected by inspection ) or other factors when he does a video tour and looks at the property you are thinking about buying? Can you ask your property manager to look/visit property for you and give you his input (even if you don’t have a property being managed by him yet)?

[Ric Ernst]

Hey Jason,

I am an LA based SFR rental investor and am actually in Indy right now. I identified 12 properties before I got here and toured most of them on Monday and spent the last couple days drilling down with contractors and PMs. I drove past several that looked good on paper but were either obvious dumps or in very bad neighborhoods. I can tell you that MLS pictures and wholesaler posts often look far better than the real deal and that many out of state investors (particularly from California) are grossly overpaying. I'm not sure what sort of properties you are looking at but the $30k - $50k properties on the MLS are generally in need of serious rehab to make them habitable in my experience.

I would recommend at least one trip out here to see for yourself. Unless you are looking in upscale areas, the neighborhoods vary from block to block. A good PM can help you identify areas that will attract good tenants and ones that won't.

You really need to establish a relationship with a contractor and PM ahead of time. It helps to meet them in person and let them know you are serious and in it for the long haul. If you are going MLS, reach out to some large brokers and see if they have anyone on their team that works with investors. If you find one, treat her or him like family and they will have your back.

There is opportunity but be diligent and build a trusted team. Best of luck to you!