It’s a commitment

If you answered yes, then you could be setting yourself up for a huge failure. I’ve recently written my first location e-book on locations that I have been investing in. These e-books have been offered to the general public to get the inside word on wHere a professional investor buys for himself and clients. wHy would I offer this? Wouldn’t I be creating my own competition with other investors snapping up the bargains we buy?

Yes, except that I am no longer investing there. It’s not that there are not some good deals there, but we can’t get enough of them to satisfy our clients anymore. So I move on to new secret locations to find more deals. And the savvy investor who doesn’t want to pay the full buyer’s agent fee can buy a book with all the pros and cons of the location and then go there themselves and snag a bargain. The downside is that because the market is in full swing, they need to move fast and make quick decisions.

But something unexpected has started to happen. Buyers of my books are buying houses in these locations sight unseen. In all honesty, they probably do not even know where the suburb is.

So, wHy would they buy a house there without even going there?

Now, I am sure some of them are reading this. And they may not be too happy that I am writing an editorial devoted to this, but it’s just insane. Sorry if I care, but I don’t like seeing investors lose money where it can easily be avoided. This is not just directed at them as I know thousands of investors buy properties without viewing them.

But so much can go wrong in doing this:

• Floor plan is terrible

• Hidden or concealed faults not in photos online

• Real estate agents then recommend a building and pest inspector – but do you think they will offer one that’s going to scrutinise the property so the deal could potentially fall over? I think not

• Bad retaining walls not shown in photos

• Trick photography, using a wide angle or a zoom lens

• Making three-bedroom homes plus study look like a four-bedroom house – very common

All of the above (plus more) can trick a rookie investor into making a wrong decision. All of which could be avoided if they personally inspected the property or had a professional buyer’s agent do the inspecting for them.

To put some enormity to this I want to give you an idea of how few good properties there are in any given market at any given time. As a buyer’s agent, on any given day I can inspect between 15 and 24 potential properties. Yes, it’s a very busy day. I average three per hour.

For the exercise, I will use 20 house inspections. Out of the 20 inspections, I average eight to 10 suitable houses to make offers on. So that means that 50–60% of the houses had bad floor plans, issues with the block, or the surrounding streets were not fantastic. Yes, over half.  Of the remaining eight to 10 houses, I put low-ball offers on all of them – with the end result of securing one or two for the right price.

In reality, my hit rate from inspections to secured deals is between 5% and 10%. That’s extremely low!

So, how could you possibly buy a great deal when purchasing a property sight unseen, with odds this low? The answer is that you cannot. And buying a bad lemon property can financially ruin an investor for life. For such a large investment in your life, go about it the right way and go visit the property and location or use a professional buyer’s agent to do the job for you. Sure it could cost you a few thousand more, but that’s cheap insurance to ensure you get a great house.