If you read the first part to this series, Creative Financing for Young Real Estate Investment, then you already know how to “get creative,” when it comes to making money appear out of thin air for Real Estate Overhead. In this post I want to talk about valuation, but not Real Estate Valuation – instead I’m going to go into how to evaluate your investment criteria.
I am going to focus strictly on residential real estate for right now (properties with 4 or less units) since that’s what I assume most of you will be looking into. Before you can even think about prospecting for properties you need to prospect for a geography. The best way, traditionally, to do this is to check out market trends for certain cities. Forbes published a good article in September 2007 about The Best Rental markets in the U.S. The idea of investing in a far off city is not a good one, at least not initially… You need to be around to manage and micro-manage your tenant base, as well as the property(s) .
An ideal market is one where single family homes aren’t too expensive ($100k-$180k), assuming for that price you can pick up at least a mild three bedroom. Conversely, you need to make sure that the current area receiving rents supplement more than just the mortgage! I tend to Continue reading