Out of state investing

[Bryan Satter]

Hello BP! Thanks in advance for your feedback!

I am working with a quasi turn key company to purchase my first out of state property. The numbers are good in all respects and I am fairly comfortable with the deal. It currently has a tenant who is terrible but I have out it under contract saying I will not close unless property is delivered vacant.

My main question is how to accurately gauge repairs needed. I've been given an estimate by the middleman I am working with. But since this is a place I will not be able to see myself I would like someone on my side to independently verify the scope of work. Since this is an all cash deal and the tenant issue exists, am I able to get a home inspection before I close? Would really like a second opinion from someone I hire to look at it. 

How do you guys handle out of state investments that you can't see and are paying cash for? Thanks.

[Charles Worth]

@Bryan Satter

I am not sure if its just the way it was described or the way it actually is but it does seem more like a JV than a TK buy. The difference at least to me (there is no actual definition) is:

1) One of you picked a place with a tenant inside while most TK normally work with vacant properties and rehab them 

2) You should not really be involved with the scope of work in the sense that you are the one who has to come up with costs or be responsible for anything that happens during that work. Obviously, its good to get it and good to vet it to make sure your final price is reasonable compared to what you can do by doing it through partners but for any true TK I have seen the property should be delivered rehabbed at which point you would get an inspector to ensure the job was done to your expectations otherwise you do not pay 1 cent.

3) Will this person manage the property for you afterwards? This is probably the most important part (to have a manager) and also ensures he has to live with the property after he sells it.

Even if you are buying cash unless I knew the area I would get an appraisal, at east some type of BPO or at the very least a a good realtor to give you their opinion. I would also have someone drive by and check on the tenant selection unless I really trusted the partner.