Posted by Tim Conde on January 24, 2001 at 14:51:21:
You’d have to ask them since I was not involved. From what I can gather, a L/O was entered into and when it came time to exercise the option, the property had gone up to the point where the owner refused to sell. Breach of Contract suit? Absolutely. But let’s face it, a good lawyer can get you out of most anything. How much money do you have to fight it? My attorney gets a $10,000 retainer. Can you cough up $10K to fight that case? The old owner sits back and says “Sue me.” What do you do? To me (understand that, TO ME) a sale is a cleaner deal. I have title to the house. I have a deed. I have something that gives me the property, not just the right to buy it later. Maybe I am behind the times. But I prefer to have clean deals. Others may have opposing viewpoints and I respect them, but I just don’t like the “what ifs…” hanging over me.
I just started viewing Carelton Sheets’ program. I live in Michigan and want to know how this program works for out-of-state investing. More specifically, is it recommended to buy properties in other states? The only problem i can think of is viewing the properties prior to closing. Obviously, I do not have the funds to fly all over the country to view properties. Any comments or tips would be appreciated
Posted by Tim Conde on January 09, 2001 at 12:46:30:
The majority of my investing is done out of state. I live in Northern California and investing here is pretty much out of the question within 25 miles of where I live. When I got started I bought local properties (as local as possible anyway) and only made my move out of state when I could do it with confidence. My biggest headache is finding good management. It seems I can always find the properties, but turning them over to managers and essentially hoping for the best is hard. I have made a few mistakes and have learned what to look for in a manager, what to ask, etc. When I go into a new place, I find good management FIRST, THEN I look for properties. If there’s no good management, I do not invest, and that has happened. After the deals are all made, I visit my properties, unannounced, every once in awhile, certainly every few years. The ones that the manager said was vacant better be vacant or there’s going to be big trouble. I know Sheets recommends doing all your investing within something like 5 miles of home. Some people can do that, some can’t. Don’t be afraid to go out of state, but don’t do it half-assed either.
I agree completely with Tim, and I do exactly the same thing. It’s reassuring to me to know that someone else does it the same way I do. I have properties in Michigan as well as other states. To find properties, work through potential property managers first. That way, you’re “interviewing” them as you go - and checking their compentency and honesty, and using their expertise on the local market. I also have more than one property manager in each town - or at least good backup that keep in close contact with and I would feel comfortable hiring on in an emergency. But I agree with Tim completely that you find good property mgt. first, and don’t invest if there isn’t good mgmt (and there isn’t in some towns). I also visit my properties at least once a year. And someone once said it isn’t so much the properties you watch like a hawk, it’s the property mgmt.
What drove me to do it this way was my spouse is forced by her job to move around regularly. And my only choice was to figure out how invest long distance and do it right, or give up the financial dreams of my life. And I’ve been doing it successfully for 12 years now. Also, it looks like the Internet can be more and more helpful to look long distance as more newspapers, local MLSs’ and local FSBOs’,foreclosure lists, etc. get on line. Good luck!
Posted by Tim Conde on January 12, 2001 at 14:07:50:
It is a little like asking how I finance a deal once I have uncovered it. There are so many options.
I generally do my own inspections. I do buy properties sight unseen but “subject to”. I do not do lease options, ever. I have had partners burned by them in the past and I want no part of them, based on their experiences. The advertising source depends on the demographics of the area and the traffic patterns in and around the area. I like billboards, always have. Newspaper has been good to me, too. I don’t do taxis, bus benches, and things like that. Don’t forget that there are different ads going on here. One is to prospective sellers, and one is to prospective renters. I do a fair amount of farming for sellers rather than the ways Sheets teaches. Some of my biggest hits have been billboards near freeway bottlenecks (for sellers) and in and around large employers with low skilled workers (for tenants). As with any advertising program, you don’t just tack ads up and wait for calls. You have to monitor results and change accordingly. Maybe flyers on doorknobs will work better in one area than another. You have to try many different things to find what works. The only time I let managers advertise for me is if they can show me proof that their methods get results.