How to do a deal hours away from your own market

[Stephen Barton]

I had the oddest phone call a couple of weeks ago. I was working away when I had a call that would essentially change the my whole mindset. Up to this point I have completed somewhere around 40-50 deals. Most of those are wholesale deals which does not include the buying and selling of each deal. A few are retail deals being an agent (which made me more money than the average wholes ale deal) where I also represent other investors simply looking for deals. 

So, I am doing what I always do working on getting another deal when I got a call that really changed how I look at finding deals. A call came in from someone who owned a property in Manhattan Illinois. Manhattan is an easy 3 hours drive from where I am in Indianapolis Indiana. My target market is Indianapolis and the surrounding area. The "surrounding area" has now changed to "where I can drive in a day's time" ha! 

This seller inherited a 4 year old house and they needed to move to another part of the country. I ran the numbers and made my offer. Ignoring all my instincts to pass on the deal and refer them to someone in their own area I pressed on. Knowing that it would not be easy. To my surprise, they accepted my offer. Once I arrived to complete my walkthrough of the property (which I always do before I put something under contract) I noticed that the house even though it was only four years old was actually really dirty. Not that bad, but definetely dirty and in need of lots of paint and a little carpet. 

I do not think it is good to brag about numbers -even to other investors. To me, money is nothing to brag about. We planned on the absolute worst when making our offer which helped us when we sold. Our mentallity was if they accept our offer then it would be worth it for us to do the deal, and if they did not accept our offer well then we should not be trying to do a deal in this area anyways- nothing gained, nothing lost. I should go back and remind anyone reading this that while I do my own deals from time to time- I have a friend/mentor who I partner with especially on bigger deals that I brought in on this one. With the backing of someone who had way more experience than me I moved forward with the confidence that when something crazy happens I have "backup". This is HUGE for any investor- especially any new investor. 

For my business partner we had to look at doing a deal in this area sort of the way we look at most of our deals. The numbers have to make perfect sense for us to spend the time doing the deal- let alone spending the money. So, if you are only making say $1,000 then all of the time you spend on a really thin deal you lose out where you could have spent time on another deal that actually made you more money. Everyone knows this is the "opportunity cost" for investors and if you are in this business then you know it is a BIG deal. 

To conclude, never pass on a deal that is out of your area! You have no idea what you might be missing by taking a little extra time to make that deal happen. Do your research on the people you work with and research the area you plan on investing. Finding the right people, attorney, inspector, and survey company was actually not that tough. The attorney found the title company for us and really everything was done remotely. In fact, our end buyer who we ended up wholesaling this deal to did everything remotely! 

You have no idea what you are missing by just staying in the "I will only invest in MY area" frame of mind. This deal has literally changed our business in so many ways. Find out what breaking out of your current mindset can do for you and your goals! Be ultra-conservative about the numbers and you should be ok as long as you find "boots on the ground" to validate your numbers and property condition. Thanks to Biggerpockets I found my buyer in less than 3 days! From beginning to end the deal took two weeks and has been the best deal of my career so far. Thanks again Biggerpockets and God for giving me the courage to get out there and make things happen!