Should I Visit Every Property Before Making Offer?

[Jack Perfett]

Hello! I am currently on the hunt to buy my first house hack in the Philly area as this is where I will be working. However, I am currently living in State College finishing my last semester of school at Penn State. Should I be making the 6 hour round trip drive to Philly to look at every property that's numbers makes sense or would it be okay to make an offer without seeing the property in person. 

I would appreciate any responses and thank you in advance!

[George Azita]

Seeing the physical property is only a small part of what you need to see and properties always look nicer in pictures and videos than they do when seeing in person. I think what is more important than seeing the property is you need to see the neighborhood, adjacent properties and the quality of potential tenants, or even the quality of potential buyers for when you want to sell the property.

In regards to the many post saying you need a good real estate agent who will make videos and watch your back, I don't believe many (if any) of those agents exist where you can find an agent who has the ability, the want and the expertise to do the math, do the mental processing and then do business that aligns with your agenda. I am not saying that agents are bad. I am saying that when you are analyzing investments that can make you profits, or put you into bankruptcy, you will be a very lucky investor if you can find an agent or broker who will do that much work for you and one who also has the necessary qualifications and abilities. Wouldn't it be great if every investor only needed a good agent or broker. In that case, every investor could be a passive investor and we would only need a good team working for us.

I personally went to look at properties in distant cities and states like Idaho, Arizona, Ohio, Massachusetts, Florida, California, Oregon, Texas and while real estate agents and brokers always claimed the properties were goldmines the properties were almost always undesirable. You have to realize that the seller's agents do not represent you and your buyer's agent has an agenda to sell you every and any property on the market as long as you are willing to buy every and any property that is for sale. No sane buyer's agent will tell you that a property you are willing to buy is not a good match for you.

 I've been in the real estate investing more than 50 years and I still deal with real estate agents and brokers every day. There are some great agents and brokers, but finding one is an exception and with properties selling so fast in today's market I find that agents and brokers are under a lot more stress and try to push properties onto buyers much more aggressively because they know they need to get you to act as fast as a lightning bolt because some other agent will beat them to the sale. So, you need to ask yourself how much time and effort is your agent or broker going to utilize for you if they know the property will be on the market only a few days. Why would an agent need to spend a lot of time worrying about what you want when there is an abundance of savvy and willing buyers near their office. Why would you think you are a smarter buyer that the buyers local to the properties for sale. Why!!! Because they've already seen the property and they know the areas much better than you and they know enough to steer clear of the bad properties and that leaves the properties nobody wants to buy for you.

I wish it was just as simple as finding a good agent or broker. I crunch the numbers for every property, first. Then, if I am interested I will drive or fly to the area and look at 5 to 20 properties. Usually, I find I don't like the neighborhoods and I find the properties are over-priced because they need too much work, the rents are too low, the management costs are too high and the prospective tenants are not the type people I want to work with. Then, you have to do your research in regards to local tenant laws and how long it takes the court to get the tenant from hell out of your rental unit. In many of the states with cold weather I find it can take 9 months to a year to get a tenant locked out and I've had tenants in Massachusetts where it took more than a year of going to court to get some tenants locked out. Las Vegas has been the best area and I've had the court get tenants out in less than 10 days, but not always. In California, I've had most tenants locked out in exactly 7 weeks and my total loss is usually about $8,000 to $9,000 and what it takes to get tenants out is something that needs serious consideration.

Be aware that when buying properties out of your area there are many inherent risks and additional expenses that can put you into bankruptcy. You need to pay a big chunk of your rental income to a management company and when you are not hands-on with day-to-day management and when you cannot personally do periodic inspections a high percent of your potential income will be lost and I can write a book about the cons for long distant investing. I did long-term investing and made millions, but hindsight is 20/20 and when I look back even though I made millions I also lost millions because after crunching the numbers I would have made many more millions had I not invested out-of-my-area and had invested my money in my own neighborhood.

Properties look like they are less-expensive in other areas, but there are usually reasons to stay away from them i.e. rental income is too low, appreciation is too slow, taxes are too high, or the area is the Eviction Capital of The World. Just a little food for thought!