How to Safely Invest in Real Estate. Part 5 The Masterlist

By
Real Estate Agent with Fore Properties

This blog starts to really dig into the real estate investing process. The first step is to create a Property Masterlist, moving from very broad categories to a specific house. 

Create lists that get progressively narrower.

    • County
      • High job creation area
      • High mobility area
      • High retirement area

 

    • Neighborhood
      • Best neighborhood you can afford for a particular price point
      • Fits your niche
        • School-age
          • What is the best school district in town?
          • Info available on the web
          • Ask your MMG
          • Talk to teachers
          • Ask friends
        • Low income
          • Tends to be run-down
          • Look for pockets that are nice
          • Well-kept yards
          • Don't budget any appreciation
          • Lower cost of investment
          • $50,000 mortgage threshold
          • Section 8 rental market
        • Middle income
          • Joe Blue Collar
          • Young families
          • Singles
          • Stable renters
          • Hit hard by bad economy
          • Neighborhoods near plants and/or jobs
        • High income
          • Can be demanding
          • Usually shorter-term
          • Higher risk of vacancy
    • Street
      • Quiet streets are good
      • If possible, stay off main road in neighborhood
      • Be careful not to be too far back
      • One block off main road
        • Potential renters still see sign
  • Segment by sales price
    • Follows same guidelines as neighborhoods
    • Use a range
      • Ask Realtor for ranges in particular neighborhoods
  • Segment by rental price
    • Particular neighborhoods have an average rent
    • Follows same guidelines as neighborhoods
  • Segment by vacancy rate
    • Use gov't stats vs. newspaper classified ads
    • Go to Market Snapshot on http://www.danaskins.com/ and look for the "Moore County Rentals" table and graph

 

Determine the best niche for your area. Our goal is not to reinvent the wheel, but to spot and live in the best trends. Many of the fast food chains will not move into an area until McDonald's moves in first. They know that if McDonald's likes an area, it must be OK for them as well. That can be a great research strategy for real estate investors, too.

  • Least competition
    • Why is there no competition?
      • No demand
      • New market
  • Medium competition
    • Renters "trained" to look in this niche
    • Group of ads attract more attention
    • Could become dominated by major player
  • High competition
    • Is it necessary
    • Gold rush mentality
  • How much money do you have?
    • Be realistic
    • Don't get over-extended
    • Hit singles

More to come.

Dan.

Dan@DanAskins.com

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