{"id":192,"date":"2019-01-27T22:40:58","date_gmt":"2019-01-28T03:40:58","guid":{"rendered":"http:\/\/www.davidhedges.info\/?p=192"},"modified":"2019-01-27T22:40:59","modified_gmt":"2019-01-28T03:40:59","slug":"purchasing-our-of-area-real-estate","status":"publish","type":"post","link":"https:\/\/www.davidhedges.info\/index.php\/2019\/01\/27\/purchasing-our-of-area-real-estate\/","title":{"rendered":"Purchasing our of area real estate"},"content":{"rendered":"\n

Have you ever considered buying rental real estate that is\nnot local to you, maybe only seeing pictures, or in a city you\u2019ve never been to?<\/p>\n\n\n\n

I had at one time bought 2 houses in the Austin, TX area. At\nthe time I was very inexperienced and didn\u2019t have a lot of the processes around\nthis worked out. The two houses that I had bought in TX were both bought\nwithout a lot of planning behind them, both were new construction, and at the\ntime while prices were nearing the peak in the of the housing bubble, we hadn\u2019t\ngiven any thought to management, vacancy, or maintenance. Both of these housed\nnever did well, one barely broke even, while the other lost money each month,\nbecause shortly after buying them, rents and housing values dropped. It was\nrough but we finally were able to get rid of these, I lost a lot on them, but\nwas happy to finally be rid of them. <\/p>\n\n\n\n

A few years ago, I had the opportunity again purchase a rental\nproperty that was not local. I thought I don\u2019t have the ability to be there\nvery often, but this time I want to plan it out better, and put a process\naround it. Below is the process I use in purchasing out of area real estate.<\/p>\n\n\n\n

Review the properties<\/strong><\/p>\n\n\n\n

I start by getting specific in what I am looking for. An\nexample would be \u201cI am looking for a 2-3 bedroom house that is priced between $40-70k\nand either needs no work, or minor repairs\u201d<\/p>\n\n\n\n

Once you have this, I begin looking at houses that are in\nMLS, that wholesalers send for me to review, craigs list, Zillow, etc. I review\nthese looking over the pictures and reviewing what is stated about the property\nand note all of the ones that meet my criteria. I also run rough estimates of what\nmy costs vs rent will be to weed out ones that just won\u2019t be profitable. In the\nend I may have gone over a few hundred houses, but will have around 10-15 houses\non my list. <\/p>\n\n\n\n

I\u2019ll take my list and fly or drive to the city. I will spend\na day driving the areas these houses are in looking at the following:<\/p>\n\n\n\n

  1. I\u2019ll drive the neighborhood to see if it looks safe\nenough that I would feel comfortable going there if I had to.
    1. A safe neighborhood also will help in finding and\nkeeping tenants.<\/li><\/ol><\/li>
    2. Do the other houses in the neighborhood look\nwell maintained and is the neighborhood free of trash and litter. I also want\nto see that there is not an abundance of board up houses. <\/li>
    3. I look at who is out on the streets.
      1. Kids playing = good<\/li><\/ol>
        1. Working age adults looking like they have\nnothing to do = bad<\/li><\/ol><\/li>
        2. Finally, I look at the house (I don\u2019t schedule a\nrealtor I just look from outside).
          1. Is it in the condition it looks like from the\npictures I saw<\/li><\/ol>
            1. Does the exterior look well maintained?<\/li><\/ol>
              1. Does the roof line look strait and the roofing\nlook like it is in good condition? <\/li><\/ol>
                1. If there is an AC unit, does it look like it is\nin good condition. <\/li><\/ol>
                  1. Does the yard look kept up, or look like the\nhouse has been abandoned. <\/li><\/ol>
                    1. If I can see in a window, I look to see if the\ninterior looks ok too. <\/li><\/ol><\/li><\/ol>\n\n\n\n

                      Make an offer<\/strong><\/p>\n\n\n\n

                      After my trip to the area, I will typically only have 0 \u2013 2 houses\nthat met my criteria. Assuming there is one left. This is where I would make an\noffer, contingent upon an inspection. If the offer is accepted, I will\nfly\/drive to the city again to meet with the inspector and actually go into the\nhouse. I will walk the house with the inspector, and note any items that are\neither safety related, or that could be issues that would be very costly to\nresolve. <\/p>\n\n\n\n

                      The results of the inspection will determine if I need to\nback out of the deal or can move forward. In the event of a larger item, one\ncriteria is, can it be resolved within a month. If so, I may either ask for a\ncredit or to have the issue resolved prior to closing. If it is not resolvable,\nmay take multiple months to investigate and repair, or has the potential to\nturn into multiple high cost items, I\u2019ll back out. <\/p>\n\n\n\n

                      Close on deal<\/strong><\/p>\n\n\n\n

                      I don\u2019t always, but will try to travel 1 more time for the\nclosing. This gives me an opportunity to drop by my property managers office\nwith the keys, and go over the items I need resolved before placing a tenant.\nIf I do a remote closing, I will send the keys and details through ups or fedex.\n<\/p>\n","protected":false},"excerpt":{"rendered":"

                      Have you ever considered buying rental real estate that is not local to you, maybe only seeing pictures, or in a city you\u2019ve never been to? I had at one time bought 2 houses in the Austin, TX area. At the time I was very inexperienced and didn\u2019t have a lot of the processes around […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[4],"tags":[],"class_list":{"0":"post-192","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business-blog","7":"entry"},"_links":{"self":[{"href":"https:\/\/www.davidhedges.info\/index.php\/wp-json\/wp\/v2\/posts\/192","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.davidhedges.info\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.davidhedges.info\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.davidhedges.info\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.davidhedges.info\/index.php\/wp-json\/wp\/v2\/comments?post=192"}],"version-history":[{"count":1,"href":"https:\/\/www.davidhedges.info\/index.php\/wp-json\/wp\/v2\/posts\/192\/revisions"}],"predecessor-version":[{"id":193,"href":"https:\/\/www.davidhedges.info\/index.php\/wp-json\/wp\/v2\/posts\/192\/revisions\/193"}],"wp:attachment":[{"href":"https:\/\/www.davidhedges.info\/index.php\/wp-json\/wp\/v2\/media?parent=192"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.davidhedges.info\/index.php\/wp-json\/wp\/v2\/categories?post=192"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.davidhedges.info\/index.php\/wp-json\/wp\/v2\/tags?post=192"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}