Im looking to buy a property for short term rental in Kissimmee area. I was planning to fly in there soon, but due to covid my plans keep getting delayed. My realtor there told me some people out of country have bought a property without seeing it and are already making profit. I dont want to lose on good deals and wait for things to be absolutely normal. So, a open question there to see if someone on this platform has really done it or someone you know has done it?
Investor/Agent/Entrepreneur · Dallas, TX · Member since 2016 · 464 posts · 564 votes
5y
I've had my buyers do it, both out of country. I had built trust and rapport with one guy for over 1 year, and even then he went through his due diligence, my PM, inspectors, etc. Second guy had straight signed a purchase agreement, foregoing due diligence, within 10 hours of talking to me...turns out he was on a bind with time ticking on his 1031 date.
If this is your first buy, I wouldn't do it. First purchases are tough as it is, and to do it sight unseen is a huge risk. Even if it is "turnkey".
Also, don't ever, ever get tempted & wooed in by an agent. They will say anything to yield more interest and & get their listing sold. Play it smart, the world is not going to end and all the deals are not going to be gone if you don't invest in that one today. Take the time to visit, get familiar with the area, and then go forward with the purchase.
If you have deep knowledge of the city in which you're looking, then it may be a different story, and you may not need to visit. Just really depends on your expertise and background with RE, the local market, and who you have vetting the opportunity for you locally (besides the agent).
Real Estate Agent · Huntsville, AL · Member since 2015 · 60 posts · 17 votes
5y
@Raj Kaushal My business partner and I purchased an online auction property without ever seeing it. I stumbled across the property the night before the auction and was unable to take off work the next day. The day of auction, I took my lunch break, ran over to a Starbucks and won it. It was awesome
@Tim Hall so when you have the realtor walk and FaceTime the properties with you, if everything looks like it is to your liking, do you next send out a contractor for a quote or do you make this estimate yourself based on your experience?
Kansas City, KS · Member since 2019 · 58 posts · 66 votes
5y
@Raj Kaushal I think with experience comes the ability to do this. I’ve done it but only after buying houses in the same area/neighborhood so I knew what the numbers were. Also having a trust in the people in the area as well that I’ve worked with to inspect and send pics/vids.
It not impossible, but I believe the theme is having a good team that you can trust to check out the property so you do not get burned.
Thanks everyone who chipped in, this is awesome information. I guess as someone above said, with STR/AIRBNB properties, if i can get one which already has a listing and reviews, half of the job will be done. I will re-read some of the responses and get back to you guys.
Yup. Just did it. You could always have a realtor do video walk-throughs. Our strategy is to intentionally buy beat-up properties that need a good amount of work done to force appreciation, so not a huge deal. We also know ball-park costs for a worst case scenario.
If you're looking for a ready to go property aside from the standard cosmetic work you'd generally do any time a tenant moves out, I'd advise a video walk-through.
@Tim Hall so when you have the realtor walk and FaceTime the properties with you, if everything looks like it is to your liking, do you next send out a contractor for a quote or do you make this estimate yourself based on your experience?
You can, if your contractor is available and can look at properties at short notice. It also depends on the condition of the property you're looking into. We've had our contractor look at, and give us a quote for properties we were interested in, but he is very busy, so we've tried to limit the number of places to ask him to look at.
You could also have a "contingent upon inspection" clause, and have an inspector come out and assess the property once your bid has been accepted and use the report to gauge your next step. I would say though, in competitive markets, many people skip the inspection. Lots of variables with that.
We're going to close on a property where we've skipped the inspection this time around. This is because the photos and properties look sound, neighborhood is legit, we've worked with this realtor before, and furthermore we're anticipating spending $20K-$30K on the rehab. The market is also very cheap to rebuild from scratch if need be, so we use that as the absolute worst case scenario to gauge costs.
When buying an investment property, you don't necessarily have to see it in person if the numbers make sense. It's different from buying a home where you will live as in the latter case you have to make sure that you yourself feel comfortable in the area and in the property.
When you invest in real estate, the most important factor is the property analysis. If it promises positive cash flow and good return, you don't have to see it yourself. Of course, you have to make sure that the property is in a good state and will not require expensive major repairs in the near future, but a home inspection will take care of this. Also, I'd really recommend to look for an agent who works with investors (and not only homebuyers). Such an agent will really know what to look for in a property for sale and will be of indispensable help.
Regarding location, I think you are making an excellent choice focusing on Kissimmee. That's been one of the top locations for short-term rentals in the last couple of years. Our most recent data shows that the city-level average return on short-term rentals is about 4.2%. While this doesn't sound like a lot, it's actually a very good number for a city average. Of course, you can find neighborhoods and individual properties which offer a much higher return. Also short-term rentals face significantly fewer legal restrictions in Kissimmee than in other top markets.
Specialist · Cleveland, OH · Member since 2011 · 1k+ posts · 852 votes
5y
@Raj Kaushal
That is a great question.
For over 23 years I’ve been buying properties and have developed into more of a virtual program especially with the pandemic.
I spend a lot of time between Ohio and Florida but Cleveland Ohio is my main market and I am able to purchase and sell homes that I have never set foot on the property.
I would have someone with boots on the ground to take a list of pictures that are necessary for a buying decision and if you’re still not comfortable paying a few hundred dollars for a home inspection goes a long way.
Step one would be to Google the address and look at any previous pictures from the property being listed.
Step two Would be to have someone that you trust walk the property and do a video. Include pictures of the furnace, the water tank, electrical panel, outside electric meter, kitchen, bathroom, front of the house including the neighbors houses, the rear of the house, garage or outbuildings. Anything that stands out good about the property and anything that stands out bad about the property.
With that select group of pictures along with comparable data and title report one can make an educated decision from anywhere in the world.
Real Estate Agent · New York City · Member since 2020 · 818 posts · 639 votes
5y
If you are buying sight unseen these better be (a) spectacular deals in terms of returns (b) penciled out with the absolute worst case scenarios with regards to point A.
Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes
5y
I've bought several deals without seeing them first. You just want to make sure you have an inspection contingency in there, so you have a way to get out if it doesn't check out when you get on site. That being said, you should at least visit the market to gain an understanding of the different parts of town before buying something.
Burnaby, BC · Member since 2017 · 282 posts · 268 votes
5y
Yes I have done it once. Saw a great priced condo listed at 210K when it should've been 230K. I was familiar already with the building and had viewed another unit in the building previously. I kind of know what to expect from photos (they'll make it look a bit nicer than what it is) and everything looked pretty good.
My realtor put in an offer same day for just under asking at 209K and they accepted. There was a probate as the owner had passed away and their family was selling it which I was a bit hesitant about but luckily my realtor reassured me that if the sale didnt convey after 3 months he would help reimburse me interest on the loan carrying costs.
I bought it Jan 2018 and ended up selling it this past October for 262K so made a decent return and the property was cashflowing as well so a nice success story.
I would be cautious if I was unfamiliar with the area and doing long distance investing unless I have a realtor there I trust
Investor · USA · Member since 2015 · 168 posts · 243 votes
5y
I am an out-of-state investor and most of my properties were bought unseen. I am even NOT interested in the videos and images that realtors sent to me. Because even I have the videos and images I still have no idea how much the repair costs will be.
So the answer is very simple: try to find the repair costs before you make the bid. That's exactly what I have done: my property manager has a rehab team. Each time I found a property that I was interested, I wound send him for a repair cost estimate. Based on his data then I would make the bid.
Real Estate Syndicator · Portland, OR · Member since 2014 · 453 posts · 312 votes
5y
It is possible and doable. I guess since the pandemic this has been a thing lately for buyers. There will be challenges but if everything has been laid to you and the agent has been transparent. Also, make sure that you are dealing with a reliable agent.
Investor · Ocala, FL · Member since 2016 · 299 posts · 110 votes
5y
Be careful if someone is trying to get you to put a nonrefundable deposit on a property to hold it. I recently was bidding in an auction and another bidder had left bids. He won (I ran him up quite a bit) and it turned out he was a scammer. When you Googled his name, he had advertised properties using pictures which were not current. One guy complained he sent in $1,600 nonrefundable towards the purchase price and went to see it prior to sending the rest of the down payment. Turned out it was an empty lot where the house had burned down about 5 years before and the pics were from before the fire. He was out the $1,600 (and there were several others posting similar situations with this guy). I did manage to get the home under contract for my bid just over the last legitimate bidder instead of the bids I placed against the scammer. This is a home that looks great from the Zillow pics, but needs extensive rehab. BTW - the scammer wasn't a realtor and claimed to be a wholesaler (he's in the Tampa area), although he was selling properties in several states.
Real Estate Agent · Tampa, FL · Member since 2020 · 24 posts · 12 votes
5y
Hi! I work with investors all the the time that buy site unseen! Some of them even pay an extra 5k in order to purchase it site unseen and beat out the other competition in the Tampa market.
@Raj Kaushal, I have been looking into Kissimmee also, but am on the west coast and wouldn't be able to set foot in the propertie(s). Thanks for posting the question i have been asking myself