Behind the scenes: Was it stupid of me to purchase 8 investment properties without physically seeing them?

Yes, you read that correctly — I purchased eight investment properties in a row, without ever stepping foot in them. This is called purchasing a property ‘sight unseen’.

I hear what you’re probably yelling at the screen right now:

“What?! Is this guy NUTS?”

And I can understand why. At face value, that sounds like it’s riddled with risk. 

But let me tell you my story…

My very first property purchase was the home I live in, it’s a home in Sydney. It was all smooth sailing until I made steps to purchase our next property – my first investment property. 

Upon speaking with the bank, I realised that my borrowing capacity was fairly limited because of the mortgage I was paying for my home. This meant I needed to find an investment property that was attractive to the bank (so they would lend us the money) – that is, it ticked their boxes and had a strong/stable income. 

I realised that there were no properties in my local area that matched this criteria, so I had to widen my search to other locations in Australia. I was pretty busy at the time, so I paid professionals to investigate the different things needed when purchasing a property (pest, building inspection, etc.). It was also difficult for me to visit all of these properties in person, so I ended up relying solely on professional advice to make my decisions.

The process seemed to work well, and eventually I located my first property… without ever stepping foot in it. It was a success and I still have that property today. Over a period of about three years I repeated the process… and I now have nine investment properties in total, and the portfolio is currently cashflow positive (meaning I get money back in my pocket each and every week I own them). 

However, this isn’t a blog post completely about my story. Instead, I want to explain the strategies I’ve learnt along the way, that have helped me get to where I am now.

Strategy: Investing Without The Emotion

The first concept is ‘emotionless investing’, which is, in other words ‘making decisions without emotion’.

Choosing a property is a pretty big decision – and emotions can cloud decisions quite intensely… so I make every effort to remove my feelings from the process. I regularly ask myself emotionless evaluation questions like:

• Has this property passed pest and building inspection?
• Is there a strong rental yield in the area?
• Has this property passed other technical tests that demonstrate capital growth drivers?

These answers provide black and white, unbiased, data with ZERO room for interpretation. 

What I don’t ask myself is:

• Do I like the look of this property?
• Do I like the feel of this suburb the property Is in?
• Does this property have a nice feeling to it?

The above questions would be great for a property I LIVE in… but can be dangerous when used on an investment. Hopefully you wouldn’t purchase shares (or engage another investment vehicle) based on questions like “do I like the logo of the company?” or “do they have a friendly CEO?”. 

It’s this emotionless decision making that allowed me to make the data-driven, unbiased decisions about my properties, which ultimately leads to a better ROI. 

Making decisions with numbers

Secondly, I use numbers and data to make decisions, instead of ‘gut feel’ or ‘a hope and a prayer’ strategy. 

Today there is plenty of property information available — particularly numbers, data, research and photos on almost every property, including previous sales to the current one. Many platforms and tools also exist to make this information easily accessible. 

Numbers, instead of feelings, are the foundations of smart investment property decisions.

Making decisions with professionals

As I mentioned above, making decisions using the advice of professionals is a CORE strategy I use and recommend for every property purchase.

Here are some of the professionals you can use, and the value they can provide to you: 

Buyer’s Agent 

A buyer’s agent can research / source / negotiate / perform due-diligence and secure the property for you (this will further help removing the emotion from the ‘numbers & negotiation stage’). For more information on our buyers agency ‘InvestorKit’ click HERE.

Finance professionals 

Finance professionals support you by ensuring your location meets lending guidelines, the valuation is ordered, and your finance progresses through the necessary stages.

Lawyers/conveyancers 

Lawyers and conveyancers review the contract and lease, conduct negotiation of clauses within the contract, complete the necessary due-diligence via different searches and verification, and communicate with the sellers’ side.

Accountant

Accountants ensure you are set up with suitable tax structures for the purchase of property, e.g. trusts, personal name etc..so your purchase is suitable to your situation.

Pest and building inspectors 

Pest and building inspectors (plus other types of inspections where necessary) review the current condition of the property to check for any minor/major issues.

Managing your mindset

Managing your mindset is also very important. The main question I ask myself is:

“What value would I get from stepping inside an investment property?”

And the answer to this question is:

“I don’t have all of the qualifications of some of the above professionals… so there is no emotionless value I can provide to my decision making process”.

Pretty simple, right? 

Would I talk myself out of the deal if I didn’t like something that is based only off my opinion, even when the numbers, checks and due-diligence were good? 

Would I miss out on the deal from not acting quick enough? 

Could I miss out on interstate deals because of the inconvenience of having to go out and see it? This would limit me to only where I live or locations that are easy to get to.

At the end of the day, an investment property is an asset I am earning an income from with the hope of values rising to generate wealth. I wouldn’t go and inspect my Telstra shares by visiting their head office… I’d rely on an expert to tell me that they’re OK and why. It’s a similar principle. 

Hopefully you can see the method to my madness now. To summarise, I rely on experts and avoid all emotions when evaluating an investment property purchase. 

Here the reasons why I’ve purchased many properties without ever stepping foot in them:

• Investing is a numbers game, and you shouldn’t invest with emotion. 
• I trust the advise from key professionals, so I can make my decision based on factual, high-quality data. 
• I’m not a tactical expert in evaluating ‘all the good and bad points of a property’… which means stepping foot in them provides no value to my decision-making process.
• If there are no emotions involved, it’s easier to say ‘no’ to an asset that isn’t a fit. If you fly out to see it, you might feel a lot has gone into the purchase and so you may overlook the things you should have avoided.
• You are less emotionally attached even after the purchase, it just becomes all about the numbers, re-assesing the numbers, research upcoming changes in the area and giving exceptional customer service to your tenants by working closely with your property managers.

Ready to get started?

If you’re convinced that you need to avoid all emotions and that you’d like me as a professional on your team, reach out for a confidential discussion where I’ll explain how I can help find your very own positive cashflow properties that have an added upside of capital growth. I’ll also connect you with the professionals you need to purchase an investment property in a ‘sight unseen’ manner, where we get on the ground for you, alongside the other professionals as part of the buying equation.

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