Buying property out of your local area where you live is not something that is recommended for the new investor. That’s why we made purchasing our first real estate investment out of state our top priority! Why? Because a set of circumstances presented themselves that made sense for us to follow through on and purchase vacant land several states away. We paid cash for this property at a significantly lower price than market calls for in the area. Additionally, it matched our investment criteria and was a small enough deal for us that it made sense to buy it. Why have we italicized the term “us” thus far? Because this is a topic we believe does not belong on this site, however, we learned a lot from the experience and want to share some simple lessons learned in this particular article as well as future articles. Bottom line, we are not recommending people new to real estate investing run out and buy property several hundred miles away!
Information is vital to good, sound real estate investing. No, good information is vital to sound real estate investing. No, actually, you, the buyer, gathering a ton of information about a property you plan to buy, is absolutely necessary in order to increase your odds for success at real estate investing! Phew! Okay, so we got that straight. So how do you get information and how do you get quality information? Do you call a few realtors and ask them about the area? That’s like asking a barber if you need a haircut. What about calling the local chamber of commerce? A local chamber of commerce is a good starting point, but it depends on who you speak with. For instance, you might speak to a person trying to market the area to bring business or improvement to the area. You may or may not get accurate information or the correct data given your investment goals.
Talk to multiple sources. Make several phone calls to different businesses. A reputable developer in the area can be an excellent resource for connecting you to other phone numbers to contact and possibly even some of their personal contacts.
Verify everything! Verify every statement a seller makes. If you can get someone to take pictures of the property you’re buying, that’s very important. If you’re buying vacant land, you’ll want to know if the lot is buildable, in a flood zone, zoning, utilities, sewer, and the surrounding neighborhood and subdivision.
When you contact municipalities, be sure to call back several times if you do not get a cooperative person on the phone. For some reason, people down south are nicer. They tend to spend more time on the phone with you and bear with you while you struggle to put two and two together. Don’t be afraid to let information sink into your head while you’re on the phone and ask the person on the line to wait while you write things down.
It pays to prepare for phone calls. Write down questions. It pays to have a questionnaire available. If you use ours feel free to make it your own. If you do not understand a terminology you can contact us or look it up online at any real estate investment website. Log all of your phone contacts and write down names and extensions of helpful people.
Another good source of information will be the local paper of that area. There you will find classifieds and legal notices which can give you an idea how business is growing and where and when foreclosure auctions are to take place. As you compile more places to follow up with from simply reading the paper, make sure you actually follow up! Many newspapers have websites, but you will not get the same information you will with the actual paper.
Additionally, you may also look into local real estate investor clubs and organizations. Here you will find possible online access to localized forums where you can chat and post questions, possibly make contacts and get further information. Local real estate investment clubs will help to get your foot in the door with other investors. This is important as you can learn what to do…and what not to do.
It cannot be stressed enough that is is very important to log everything you do. Make sure you write it down somewhere so that you may refer back to your notes on paper, rather than in your head. Hopefully, what you write, who you talk to and what you read will allow you to make wise decisions when considering your investment strategies for out of town real estate.