Episode 34: Out-Of-State/Province Investing
Summary
As a real estate investor, sometimes the best deals are not anywhere physically near you. Can you get on a plane, train or automobile and go to that location? Maybe, but maybe not. In today's episode, we talk all about how to remotely check out a property, close the deal when you are not physically there, and then monitor the investment from afar. Remote real estate investing at its finest, on today's episode of My Life As A Landlord!
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Full Episode Transcription
Welcome to My Life as a Landlord, where we untangle all things housing and educate the curious. If
you're looking for some entertainment with some honest, awkward conversations, you've come to the
right show. I'm your host, Dr. Jennifer Salisbury. This is my life as a landlord. Welcome to it.
Hello. Hello. Welcome to my life as a landlord. I'm so glad you've joined me today. I am Dr. Jen, your host,
your guru, your educator. I am super excited today for episode 34, which is all about real estate
investing remotely. Oh, my gosh. Right? It's the perfect scenario. Well, you got to do it, right. Just a
reminder, we do five rotating topics that are applicable to both US. And Canada. US. And Canada. This
is predictable. So we have a rotating merry go round of topics. We start with landlord issues, tenancy
issues real estate development, real estate investment, which is today. And then other Salisbury
adventures. Last week I talked about after the fact fun all about unpermitted work. Next week, I'll be
talking about another Salisbury adventure topic. Okay, so let's talk about out of state or out of province
investing. Now, just a reminder, investing is placing money with an expectation of a return. Placing
money with an expectation of return. But when you're investing out of state or outer province, you're
placing the funds with expecting a return. But you can't easily go, like physically go to that location. So
you've got to do it remotely. So it just depends. I have to ask you, as an investor, as a real estate
investor, what is the type of investment you are making? Meaning? Are you actually buying shares of a
company that is buying this property that you're looking at, or are you simply giving someone money in
exchange for a promissory note, which is a promise to pay or dollars and or a mortgage, which is a
recorded mortgage promise to pay that is recorded on the title of that property? So it depends on the
type of investment. Like, if you're buying shares in a company, you might want to go get on a plane,
train, automobile, right. You might want to just make sure you've got it. But if it's something a little bit
less, it also has to do with the dollar amount. Let's not forget that. Right. So you want to make sure that
what you're doing remotely makes sense for your comfort level. Now, maybe if you're investing $100,
that's a lot to you, maybe that's a little to you. It just depends on what type of investment what are you
helping to buy. Also, the credibility of who you're investing with may put some requirements mint on
there. If you've got a very stable company that's been doing this a long time and they know what they're
doing, they know how to do the due diligence, maybe you're less concerned. But then again, maybe this
is somebody that you know remotely, you know, from afar, or it's a family friend of a friend of a friend.
1s Maybe it's kind of iffy. Maybe you should go and get on a plane. I don't know. So here's what we're
going to talk about today. First of all, we're going to talk about remote due diligence. I do this a lot.
Remote due diligence. I can tell you a few things. Then we're going to talk about closing the deal, closing
and doing the recording and actually transferring the property or the shares. Remote close, closing. And
then everybody's favorite, remote monitoring. Now, I'm not talking about property management. I'm not
talking about that at all. I'm talking about you as a real estate investor, monitoring the status of your
investment from afar. Okay, we're going to get into all these things. Let's jump in. Okay, remote due
diligence. So let me just give you a little scenario. You've been made aware of this good deal, this real
estate deal, and they need some money, whether it's buying shares or it's buying just helping with the
down payment. And you're going to get a promissory note in the end or a mortgage in the end, but you're
not getting any of the shares. There's some deal, right? There's some deal. Okay, so you've got to
check this deal out. How do you check it out from afar? Well, get on the Internet, and there's a way that
you can do this. So wherever this property is that you're checking out that you are potentially going to
invest in, you need to look up every single court document, every single source document that you can
remotely look up at, and everything from property taxes to city, county, state, regional maps. Can you
search the title records? Sometimes you can buy records, sometimes you can see what's on title. You can
request inspections, appraisals. You can potentially look at comps, especially if you've got a Realtor
involved. You can say, send me the comps if you can't. That might be something that you might want to
hire a local Realtor to help you do this. Very likely, if there is a real estate transaction in motion, there
can be a Realtor involved. Not going to say always, but there can be. But potentially, if you feel you need
somebody to actually be there, you could also hire someone to go there. You can hire someone. You can
hire a consultant. You can hire, say, even, say, a family member and say, go there and look at this, this
and this, or just take pictures or get me on FaceTime or whatever. You can also hire a contractor. You
can hire a realtor, you can hire an inspector to go and check out this particular property, learn a little bit
more about it, but you want to look at as many things as possible without physically being there that you
can. And. 1s Honestly, when you're dealing with a remote property in a location that is new to you, new
to you, maybe you've done some work. Let's say you're looking at a property in Texas, let's just say, and
you are not from Texas. You don't know anything about Texas or this county or wherever this is. You
need to drill down and learn about what are the ways that you can get the source documents. Honestly,
the biggest thing is you got to do I know you're looking at the Internet and all the different things that I
just said. I would pick up the phone and call city hall or the county seat and say, look, I'm looking to buy
this. You could call the chamber of commerce that's there and just say, I'm looking to buy or be an
investor in a property at such and such address. I need to know how I can look more about this. Now,
there's also a couple other ways you can do this. There is usually now it depends on your state or
province or territory because some of them are different. Some of them require attorneys. They require
lawyers that have trust accounts. Sometimes you have to have an escrow officer that has a trust account
because there's got to be this third party that has a trust account to get all of certified funds where you
wire everything in and then everything is actually paid for once the deed is transferred or the deed is
transferred and then it's paid for. However it is, my point is that you've got to educate yourself on the
process in that area, right? You've got to know what's going on in that area. But you can also say if
you've got a lawyer, if you got a title officer and say, look, I'm looking for. How do I get the most due
diligence? How do I know if there's any liens or fines or code violations? Last week's episode was on
code violations. So you might want to talk about that and just say, is this code violations? So make sure
you're looking at as much as you possibly can. But you can search on the internet, you can make some
phone calls, and you can hire people locally to actually go boots on the ground there. Okay, so that's how
I would do remote due diligence. There's many other little tricks to the trade we'll get into in other
podcasts, but that's sort of the summary, the 10,000 foot level summary. Let's talk about remote closings.
Let's say you as a real estate investor is going to provide X amount of dollars to help buy or fund the
renovations for a particular property. And one of the things that you want to make sure that you do is you
are registering a mortgage. If you hold the mortgage or you've got to have some kind of document,
maybe you're going to be an equity investor. Maybe you're buying shares in the company. Whatever it is,
there's very likely going to be something that you have to sign. You might even have to get some stuff
notarized. If you do have to get some stuff notarized, which does happen, you can call a mobile notary.
You can also make an appointment with your local bank. There are other vendors that do walk in notary
services, which is amazing because normally you have to pay quite a bit of money to either go to an
attorney or a bank. Bank will do notary stuff. And so it can be difficult to do notary, but you can do it
remotely. Now, here's the trick. If you're doing cross border notary services, meaning let's say you're
helping buy property in Texas, but you are in Canada, you must ask the attorney or the title officer in
Texas if a Canadian notary is okay. We've run into this quite a bit, that you've got to make sure that
whatever country is okay with the other one. Or maybe you're in Mexico and you're trying to close on
this deal. If you have to have a US. Notary or you have to have a Canadian notary or whatever it is that
you have to have, make sure you ask that question, because closing remotely can get a little weird, and it
can come from sort of out of the blue. So you need to ask those questions. Okay? So you've done your
remote due diligence. You've done your remote closing. Now let's talk about the monitoring of your
investment, right? Let's talk about all this monitoring your investment remotely. It completely depends
on the property and the business itself. Are these apartments? Is this a new build? Is there property
managers involved? What is it that you are going to expect to get on an ongoing basis based on your
investment? Is this something that you decided that you wanted to invest for five years or five months?
So it just depends on how you've set it up, right? It's how you've set it up. So let's say you helped buy a
property that is a bunch of apartments, and there's a property management and company in place, and
you're going to get quarterly statements, and you're going to get annual dividends, let's just say based on
your investment. Well, that may be the only communication you have that will give you some updates on
how this property is doing. You'll get quarterly statements and then yearly dividends. Is that okay? Is that
enough? Do you want more? You need to communicate with those that you've invested this money with.
One of the other things that you might get is if you're in the US. You might get a 1099 for interest at
the end of the year, or if you're in Canada, a T five for the interest paid to you. And so you need to kind
of understand how this looks. 1s But the other thing is that it's not all about the money, necessarily. As a
real estate investor, that money represents how well the business is going and how healthy that property
is. If you want to talk about different ways that you can gauge and make your properties very healthy and
then resulting in profitability and great communities to live in, that is really what a good real estate
investor is investing in, is improving communities. So you want to also make sure that you are watching
and reviewing if there is issues in the neighborhood. Has it turned into sort of the ghetto around your
investment? Maybe there was a fire loss next door and you don't know about it. So there's a lot of things
that you need to know as a real estate investor that is about money, because real estate investing is about
money. You're investing money with an expected return, but you're also looking at the non monetary
aspect of it. And so I encourage you as a real estate investor, don't just look at the numbers. Don't just
look at the numbers. Same thing with due diligence. You're going to look at the property. You're going to
look at everything. But zoom out. And knowing that, for example, in the I 35 corridor between San
Antonio and Austin, knowing that Mr. Elon Musk is building a gigafactory right outside Austin, you
think that impacted the real estate around Austin? Of course it did. But that had nothing to do with the
monetary value of it. Just knowing the aspect, the employment. And who are the employment centers?
Who's coming in, who's going out? Is Amazon moving in? Is United making a new hub? All these
questions that you can push in and the best source for both the due diligence and the monitoring as you
go can be your property managers on the ground. But I also utilize the local chambers of commerce.
You've got to make sure that you're talking to the local chambers of commerce about the properties,
about the overall economic viability for your investment. Okay, so there you go. This is a very high
level, out of state, out of province investing remotely podcast. We talked about remote due diligence,
remote closing, remote monitoring, ongoing monitoring, both monetary and non monetary. But here's
your call to action. I want you to look up the entity, be in your local, state or province that does all of the
recordings. On Title. Now, if you don't know what that means, just give me a second here. You might
have to call a lawyer, a title company, or even your county clerk, your county clerk, even city hall, they
might know what to do. But you're looking for the entity in your state or province that records the
documents on Title. Here's what I mean. In Hawaii, it's called the bureau of conveyances. In british
columbia. It's called BC land title and survey. And I looked up the one in Texas, and I got a little bit
confused. I would actually have to call the county clerk in Texas one of the county clerks, because you
want to know actually here's one of the tricks of this, is that if you know the name of the entity that
records the documents on Title, it is very likely not all of them do it. It is very likely that you can get a
login for that entity and potentially either view or pay for recorded documents on the title of the property
that you're looking at. It can happen. Now, I have to tell you, as technology evolves, it can get crazier and
crazier. I've seen this happen where I can see documents one week, and then they do a software update,
and then who knows? I can barely do a search. So it's sort of a double edged sword. The default is pick
up the phone and call your local city or your county or your regional district and ask them and tell them
that you were listening to this podcast and this crazy lady telling you to look up the entity that records
documents on Title. There you go. There's your call to action. All right, as always, let me know your
comments, your questions on our Facebook group for My Life as a Landlord or in YouTube. You can
comment on the Episode 34 comment area for My Life as a Landlord. And please know that I create the
content for my next podcast in my five rotating merry go round topics. I create all of that based on your
question, questions, and comments. So if you've got an idea, a story, a question, shoot it my way. Let's
get the conversation going. In the meantime, join me for next week's podcast, which is another
solisbury adventure. For those of you who may not know, I was on a TV show on the Discovery
Channel. Next week is episode 35, and the title of it is not Canada's Greatest Knowitall. I will see you
there.
Thank you for joining us this week. To view the complete show notes and all the links mentioned
in today's episode, visit our website at www.mylifeasalandlord.com. If you're looking for educational
resources for getting into real estate investing, becoming a landlord, or even a better tenant, then I have a
page on my website to get you started looking for a solution to the pickle that you're in. I have
suggestions for that, too. You can throw your situation on my Facebook group, MyLife as a Landlord,
and let our community help you with solutions. Also, before you go, make sure you subscribe to the
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you again for joining me, Dr. Jennifer Salisbury, in this episode of My Life as a Landlord. I'll see you
next time.