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Who does this???
Old 05-30-2007, 04:32 PM   #1
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Who does this???

I rehab properties for a living and own my own property managment company. Recently we've ran into several out of state real estate buyers that closed on properties sight unseen, no inspections, no due diligence. It really scares me that people are throwing money at investment properties like they were buying M&Ms at the local quickie mart. I guess this is the equivalent of buying stocks with any due diligence.
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Old 05-30-2007, 04:45 PM   #2
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I sold my condo in Chapel Hill, NC to a sight-unseen buyer from California in 2005. The buyers were a husband and wife, both attorneys. He trusted me to accurately disclose all relevant information (which I did). I sold it with high-quality tenants in it with 18 months left on their lease, and the place was nicely cash-flow-positive.

The CA buyer was snapping up a few properties around Raleigh-Durham-Chapel Hill for investments. He had a ton of money available from his newly acquired home equity loan (Santa Barbara or Clara or Cruz, CA - dunno?).

I figured if he felt I cheated him, he'd be initiating suit quickly. He was also diversifying risk by buying a few sight-unseen properties - the assumption being that he wouldn't get ripped off on all of them.

Must have been tempting to have all that cash burning a hole in his CA pocket and being able to snap up nice properties in NC for under $100k a pop.
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Old 05-31-2007, 06:37 AM   #3
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We routinely buy tax sale and sheriff sale properties without being able to get inside them. Of course, when you're only paying $1200, you know that the lot is worth at least that.
Yelnad --"What you're paying for is an education, not a room at the Sheraton,and sometimes that education is uncomfortable."- Jim Terhune, Dean of Student Affairs, Colgate University
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Old 05-31-2007, 06:58 AM   #4
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The herd mentality says it'll only go up in price. Wait till there's a vacancy or the city inspector writes up a few violations (trash, abadoned vehicles ...) ... then they'll "see" what they're into.

On a side note, all the RTC/HUD auctions I bought at were largely site unseen. Nobody would take you into the property ... just a drive by a few days before the auction. Buut, I never paid more than 20k for a property.

I guess 20k then is like 100k today for some folks.

yelnad - have you been able to take title with tax sales? Last I looked you were buying a senior lein with lots of opportunity for the owner to re-pay you with a nice interest rate (no title).
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Old 05-31-2007, 11:14 AM   #5
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We have had lots of "Rich dad" type books and lots of zero money down gurus lately. All of them riding the realestate wave. Now that the wave is dieing, I think we will see lots of people loose their shirts in realestate. Too bad, I love realestate.

The problem with the zero down crowd is that they want to invest without the LBYM.

I am convinced that cash and LBYM is the foundation for investing. Investing without cash is like building a 3 story house on the sand.

I personally don't gamble I invest.
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