Why would any sane real estate investor buy something before he saw it?
The majority would think that buying investment property before you see it is too risky.
What if I told you there was more to real estate investing than meets the eye?
When you think about it, real estate investing is really just a numbers game.
Why Would Any Sane Person Do This?
There will be times where a deal comes along that looks really good on paper. Say you run across a small apartment building lead in the MLS or on the Internet and the preliminary numbers look attractive. You may want to tie up this property in a way that will allow you to evaluate the investment while keeping other hungry real estate investors away.
I learned this technique from an older real estate investor friend of mine. This guy used to send out offers on a hundred MLS listings at a time, offering 50% – 65% of the asking price on each property. Occasionally a few sellers would accept his offers.
My investor friend never had to look at these properties beforehand. By including an “inspection and approval” clause in the offer meant he could always back out of the deal later if he saw something he didn’t like. Meanwhile, he was able to find a truly motivated seller with very little effort.
This true story demonstrates that with a good clause or two in the purchase agreement, you don’t have to worry about visually inspecting a property before making an offer.
Time Is Money
The main reason an experienced property investor may skip looking at a property before making an offer is time. This is certainly true if the property is several hours away or located in another part of the country. Of course there will come a time to physically inspect a property, but looking at the numbers is how you really invest.
Just To Clarify Something Here
Buying investment property “sight unseen” is only one technique that should be used under certain situations where an investor is under a time constraint. If you’re just starting out in real estate investing, I highly recommend that you go out to each investment property and inspect it.
Buying “sight unseen” is a more advanced technique with a built-in escape clause.
