Research and real estate investing
In the third grade I was assigned my first research paper. After a few minutes of thorough thought, I picked my topic–kangaroos; they could jump, they were exotic, and they had a pocket. My mom took me to the downtown library and pretty soon there were four books about the delightful animal in my bag. Next came the color-coordinated note cards, and then writing the paper as well as the bibliography. When it was all presented to my teacher–bound and crisp–I had never been so proud; I had become a kangaroo expert.
I tell you my kangaroo story to encourage even the least research-minded person; if a third grader can do it than so can you. And anyone who plans on becoming a serious and successful real estate investor needs to prepare for a healthy helping of research.
There are two major areas where I recommend seriously researching. (Now, you don’t need to use color-coordinated note cards. Those are optional). The first area is when assembling your real estate investing team: a property manager, real estate agent, and mortgage broker–this one’s important because it also equals the right type of loan. Each of these individuals is crucial to your overall success so take the time to thoroughly research here. Ask other investors if your part of a club or network. Once you find one team member, ask if they know other professionals to fill in the other two slots. Conduct a thorough phone interview asking a diverse set of questions. And always interview more than one professional for each of the three slots.
The second area worthy of thorough research is location. That’s pretty much a given; even non-real estate investors recognize the value of location. But few people give this area the attention it deserves. Check and see if there are any major renovations planned for certain parts of the city. Is the downtown going to undergo a major makeover? If so, surrounding property will rapidly appreciate.
Check schools. Check crime rates. All of this is available to you through the Internet or by making a phone call. And ask reputable professionals–preferably someone from your own team–about local market trends. What property types sell the fastest? Which appreciate faster? If the cat had been a real estate investor, then curiosity wouldn’t have killed it.
If you have the right team and the right location, you could bind and present your investment with the highest degree of pride.