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I get several calls a week from investors around the country that are attracted to our low house prices.
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27 Comments on Investing in real estate in an unfamiliar area? My advice: Do your homework!
Richard ... we are experiencing very much the same thing! Prices can be deceiving ... looking at the overall market is very important!
But the guy on TV said I can buy nice homes for pennies on the dollar?
Such great advice Richard! I know first hand! I moved from California to Colorado, to Oklahoma, to Colorado. I discovered I did not know values, neighborhoods, or economics of the areas. Thank goodness I had the sense to get a Realtor, and that saved me from several mistakes I could have made.
pays to do your homework or hire someone who has already done it.
Richard,
That's true everywhere!
What appears intially to be a bargain oftentimes turns out just to be the right price.
Brian
Richard, you are so right! Investors really need to learn about an area and also consider the costs of rehab before investing in real estate. It helps to have an expert to advise you. (such as yourself, for instance)
Richard you need another collumn on your porch there! lol. We also have the bargain hunters here! If you have to put in 50k to make something look decent and then it is still in a unpopular location it has then ceased to be a good buy anymore!
Very good pont(s) and a very timely post. Investors need to find good agents in those particular areas who will work for THEIR best interest.
Richard, due diligence is a major factor when buying a property for an investment. Although, a low price does attract a lot of inquiries.
If it looks too good to be true, it probably is. I see it as my job to steer people away from listings that may seem like great deals on the surface, but really aren't if you know the area, have done your homework and dig in a little further.
It's enticing to be able to purchase a house for that amount of money, but like you mention there is a clear "catch" somewhere along the way as far as who would rent it, what kind of condition, where it's at, long term growth.
I agree that for most investors they are best getting a house in good shape but priced well assuming your rental market has the cash flow like we do here now.
Richard, I echo as well other comments that indeed clients need to be encouraged to do their homework and research very carefully.
Had a recent situation like this where my client wanted to invest into a multiplex property. I was unsure how to convey my sentiments about this property without breaking any rules. Thank god a police car was driving by. I flagged the police car, and voila, the police officer was gracious enough to provide my client with a full report about the area.
Hi Richard, yes so important to know an area to answer those questions of why a house is priced so low. You definitely don't want someone else's headache. (Seriously though, under $25 K??).
I too have people calling for those rock bottom priced homes. When they get to the showing then they realize it is a little more work than they anticipated.
This seems to be a trend all over the country, Richard. I also think it is in everyone's best interest to do as much homework as they can but this should be more so for those buying out-of-state.
Richard while doing ones own due diligence is important it also helps to have a competent, knowledgeable Realtor® working for you in the area you are considering investing in ..... I suspect you might know one in Coweta Fayette, Georgia.
Anybody investing in real estate, without first doing their homework, is usually the guy left holding the bag.
Good post, thanks for sharing it.
Most of my investors are coming in from overseas and are interested in purchasing a home within 1.5hrs of Manhattan. Their average price range is $700k with a couple at over 1M, and they aren't looking for Foreclosures or Short Sales, just aggressively priced homes in good condition. All of them do their homework as to area, schools, resale etc. Most buy with cash and ALL have not one but 2 or 3 appraisals. Smart buyers and great for business!
Great advice Richard!