I’d like to think that I’ve learned a little more than the typical Real Estate Investor. As a former loan officer and a current Realtor, I had many benefits over the other property investors. However, there were numerous lessons I learned in the last year that I will share in the following paragraphs. I’m not going to share the more obvious tips for example “get a good property manager” because if you don’t know that don’t even think about investing in a state outside of. This is the way to go…

Are you buying from an attorney state or escrow?

A lot of states, particularly ones in eastern regions, are referred to in the east as Attorney States. It’s an attorney who drafts closing documents, attends the closing, and is also able to perform other tasks that one would expect an “escrow officer” would do. Although it’s sensible to think that it’s not really a matter of fact the attorney state adds another layer of complexity that must be accounted for in terms of time and funds. It is essential to choose an excellent attorney, and ideally one who is experienced with investors outside of the state. Also, remember that in attorney’s states, the role of the realtor is done once an acceptance of an offer has been made and accepted, so don’t expect much handholding following the fact.

Does the title company know that you won’t be there for closing?

Remind, reiterate, and reiterate everything to the lender as well as the title company over and again in regard in regards to the possibility that you’ll not be present physically during the final closing. Many title and lending institutions do not have a problem with buyers from other states however some may have a problem when you won’t be present at the closing. Let them know if you require special accommodations, they’ll have in order to make them happen (think the mobile phone notary) and ensure that the attorney or escrow agent and realtor, as well as the property manager, and seller are aware of it.

Confirm and re-confirm the charges

Instead of asking how much cost something is, you should ask “what assumption for expenses should I put in my Excel spreadsheet,” then ask: What else? This is an actual discussion I conducted with a loan officer in the last few months:

“What assumption for expenses should I put in my Excel spreadsheet?”

“Well, we charge 3% points on the loan and 10% interest.”

“What else?”

“There’s an application fee of $250.”

“What else?”

“That’s all.”

“No appraisal?”

“Yes, There’s an appraisal. It’s around 500 dollars.”

“Ok then, what’s next? Be sure to consider all fees, even if they’re minor like wire charges and overnight fees, among others.”

As you will see, lenders frequently fail to provide a full list of charges. However, if you ask what assumptions should be included in your spreadsheet as opposed to? What do you charge for your services, you can expect an honest and comprehensive answer? Make sure you ask for more information.

Who will get keys, replace locks, and grant access to the future?

After the transaction is concluded, the Real Estate Agent who is selling will hand over the keys to the agent. However, if you are thousands of kilometers away from home, what next? It’s best to talk about this before closing, and probably the property manager and agent will need to speak directly. Purchase outside the state of origin has many advantages and is much more secure than people think. As with any deal, you’ll encounter pros as well as cons however, it’s more crucial to be aware of the closing process as that’s the most likely place in which things can go wrong. In the end, buyers from out of state must be prepared for a significant amount of time working on tasks for other people. As the words of a certain FBI special agent in the 1990s would say, “trust no one.”

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