Yesterday I closed on my first true investment property. I have another which was a primary home, so I don't count it. This one was purchased with the sole intention of being a cash flowing investment property. Having bought houses before I thought I was prepared for the process. For the most part, I was. But the conditions surrounding this acquisition were a lot different than the two homes I had purchased in the past.
Being military and stationed overseas created several issues to work through. While nothing was insurmountable, I can relate to how the situations could prevent other new investors from moving forward. Especially if they're overseas like me.
1) Mindset and Trust
These were undoubtedly the two MOST important things I had to deal with going through the process. I had to let go of any fear that I had. Ok, I didn't let it go. But rather than let it control me, I listened to it. Fear isn't a bad thing, while lack of fear can be more dangerous. I kept telling myself no matter what issue arose, I would either find a way around it or the deal would die. If the deal died, it wasn't the right deal for me at this point and time. I've always been a big believer that everyone is where they're supposed to be doing whatever they're doing at any given point. If this deal turns out to be a homerun, great! If it doesn't, it's a learning point. I've failed before, I'm not afraid to fail again.
I had to put complete faith in a group of strangers I had never personally met before and systems I knew weren't completely reliable. If you spend enough time in the military, especially deployed, you become very good at knowing how to trust strangers. If you've ever had to call for artillery, or air support, relied on quick actionable intelligence, or even sometimes getting critical administrative paperwork done; you've had to rely on strangers. You hope they're the best at their jobs because sometimes it's your life in the balance. While I wouldn't be happy losing an earnest money deposit or ending up in a bad investment, comparatively that's not a lot compared to other complete strangers I have relied on.
My agent, lender, property manager were all strangers to me. They already had a leg up on other options because my mentors introduced me to them. I knew my mentors wouldn't have made the connections if they didn't think I was a client worthy of their time. I had to trust (and leverage) the knowledge and experience of my team throughout the process. They always responded promptly, made time for calls, and didn't hesitate to question any thoughts I had. I always tried to let them know they were empowered to make as many calls for me as possible. I didn't want to micromanage them. I loathe that style, and I couldn't do it from another hemisphere if I tried. As I continued to network in my market with wholesalers, other real estate professionals and investors I would always ask them who I should reach out to for help investing in the area while not being present there. They all said the same people. I knew I was in good hands.
2) Power of Attorney - Going into this deal I knew it would have to be done. I met an individual through a military investing network several months ago as I started down this journey, his name is Austin Clark. Austin and I met online haphazardly in this group and just started talking various things investing. He has his own YouTube channel where he talks about investing and various other financial things. I reached out to him and told him what I thought he is doing is really fantastic and I wished I'd had his knowledge when I was a younger Soldier. We became fast friends and message back and forth almost daily now. He agreed to step up and handle the closing for me and I was completely comfortable with him doing it since he had more experience with real estate investing than I do. We've still never met in person, but we've already been discussing starting our own company....
The process of a Power of Attorney while overseas is frustration simplified. I'm not on a base, so the only notary available is at the Embassy. This normally isn't an issue, but in the times of COVID it can be. Plus, there's no draft document to be used. In the past I've always been able to head over the JAG office (they're the military legal folks) and get a POA pretty quickly. General or specific, it could be done fairly quick. What I didn't know, it's different sometimes when dealing with a house. The title company wants you to use one they generate. Not a problem, but when you're closing in 30 days and they have to send it to you, get notarized, and return on time; well there's a lot that can go wrong. You have to trust the postal system which wasn't the best before COVID and I put them slightly behind an 88' Chevy Caprice with 200k miles on it in terms of reliability these days. The POA arrived the day before the original closing date.
3) Banks - I was never as frustrated during any other part of this as I was anytime I had to deal with my bank. They wouldn't let me do a wire transfer for the closing. In order to do it, I had to show up in person at a branch and initiate the transfer ( at least the first time). No matter how long I had been a customer, the fact I was serving overseas, or leaving a nasty remark on their Facebook page would change that. They were able to come up with a solution that I could add the title co. to my online bill pay and they would send a check, even overnight it for a fee. I'll never understand why they wouldn't allow a $30,000 wire transfer out of the account, but they were ok with me telling them online to write a check from the same account. Needless to say, I'll find another bank after this.
This is where I am going to leave off on Part 1. I was thinking about getting a bit more into the specific details or situation with the property itself but those are more technical aspects than the abstract parts about this deal. The process also left me with tons of questions - mainly about why in todays digital age can literally every document for a property purchase be digital except for the closing documents? Why will a bank mail a check but not initiate a wire transfer? Why is it with all the technology we have, does buying a property at a distance still require archaic processes? I'm sure there's a lot of legalese behind a lot of the questions, but at the end of the day if a doctor can connect to robot in another hemisphere to conduct a vital surgery - there's no reason buying a property should involve this many moving pieces.
Until next time friends....
