In the single-family home buyers market, a buyer looks for homes in areas where they want to live. They line up an agent, gather a list of properties, and then make an offer after viewing properties and picking out the best one. For a real estate investor, the perspective and approach is different. Why? Because, a real estate investor has to be more prudent with the use of their time and money, or they could quickly find themselves out of business. This is especially true for investors that have to look outside of their home states for real estate opportunities that pencil out and make sense to them.
Over the past day or so, I found myself having a very interesting exchange with a listing agent about an offer made on one of his apartment listings. Aside from the earnest money and the due diligence period, which would have been easy to work out, the listing agent said that his seller would have had a problem with the fact that we had submitted the letter of intent without making a personal visit to the property first, which would have required an upfront cost of airfare, hotel, etc…all without the property being contractually secured. While I realize that some buyers might make it a common practice to jet set all over the united states in search of properties, in reality, this approach is a risky and unwise practice. Here’s why:
A buyer could be wasting their time and money.
1. During a visit to the property, the seller could sign a contract around with another buyer
2. After visiting a property, a buyer might discover that they are dealing with an unreasonable seller
3. Doing business this way would waste a significant amount of time and money
4. Waste enough time and money, and a buyers’ business will eventually find itself driven into the ground with nothing to show for it