How Did I Stay at Home and Buy a House Out-of-state


This May, I've never yet set foot in the border of Indiana, never met my agent and property manager in real life, but I managed to get my first house under contract.

Disclaimer first: I don't recommend you to do it this way! I had to do it because of the pandemic and the slower rollout of vaccines in California, as well as the fact that the housing prices are skyrocketing during the first half of this year.

But how do you know that you actually bought a house? Won't you get scammed?

I think I can answer this question in two ways:

First, have you traded stocks? You won't ask to see a representative when you open your account in Robinhood, right? When you buy a share, you don't have a certificate to prove you really own these shares, but you are still fine with trading on these platforms.

Second, there are many ways to make sure that the house is legit. You can always use zillow or redfin estimate to know its approximate price and rent.

Besides, during the process of closing, many others are involved. For example, escrow will assist you along the way, lender's appraiser will give you an appraisal report, your inspector will also give you an inspection report.

There are so many people and reports involved. At least you can be sure of the size, the number of bedrooms, and the general idea of the house.

But what if you miss something and suddenly you can't resale or rent out the house after you close?

Of couse this can happen, or even, will happen if you keep investing. You should treat it as a business cost, but you should also do your due diligence to minimize the possibility of it happening. I will describe one of such case later in this article.

I hope I've addressed most of the concerns. Below are what I did for the whole process.

Your Team

Ask your friends, colleagues, and other investors for referrals for agent, PM, and lender. Even though referrals can't guarantee that they are good, it's still better than a complete random you find on Google. If you don't know other investors, go to Facebook and search for groups like "city name + real estate investors".

After you have the contacts, look for their reviews on google or yelp or other places.

Call them, interview them, ask a lot of questions, but also double check that they are indeed licensed.

The Market

Find as much as possible on Google and BiggerPockets about the city that you want to invest in.

Find more about neighborhoods on niche and city-data.

One very helpful tip I find is to search the city and the neighborhoods on Youtube. Usually there will be agents shooting videos talking about different neighborhoods. There are sometimes even videos just about driving through a city/neighborhood.

The Property

Always use google map to see what's surrounding the property, and use street view to see if there's any red flag.

I avoided a huge money pit because I happened to google map it, while another experienced investor friend almost fell for it.

The state of the house is pretty good, it can be rented out after maybe painting the inside with a more neutral color. 3 bedroom with such a good zipcode, with a 9 high school across the freeway. Getting it under 200k is a deal in a lifetime.

However once I opened Google Map, this North Glen Village is a mobile home park... This house not only backs up to a freeway, it's also deep inside a mobile home park.

We've talked about the location, you should find most about the state of the property from your inspection report. This is why a good inspector is very important.

If your inspector suggests you to find more experts to do some specialized inspection, don't try to save a couple hundred bucks with the risk of thousands or more in repair.

Of couse, you shouldn't hesitate if there are many small items on your inspection report. These are only expenses, if the number makes sense, you should still move forward with your deal.

It's actually relatively easy to fix most of the smaller things with a contractor your agent recommends or you find somewhere else. As an investor, you shouldn't be afraid, but should embrace deals with smaller problems. They are usually very easy to fix but comes with a bigger discount.

The Result

After deciding on a market, building a team, making many offers, I finally closed on my first ever house.

The house is under repair, but I will make an update once it's rented out.

Minwei Xu

Minwei Xu

Software Engineer at Facebook and Indianapolis Real Estate Investor
Bay Area, CA