By
now, you’re probably pretty well acquainted with the process on of focusing on
the property type and area you want. You
know the zoning which supports it and you’ve reviewed in detail the zoning
maps.
Now
what? It’s time for some legwork. You want to put into use some of that book
learning and researching you’ve been conducting.
Take
a look at your zoning maps with highlighter in hand. Now highlight the areas you want to go look
at. Then you get in your car and drive
around to take a look at those areas and neighborhoods.
It’s
that simple. It will be an eye-opening
experience.
Here’s
what you want to do specifically:
First,
and most importantly, take your time.
This isn’t a race. There’s no
winners or losers for getting it done quicker.
The
expedition is about gathering information and getting a feel for the area. Your goal is to review the area and the
properties on an overall basis.
As
you drive around the area, take note of any properties which are in
transition. Meaning they have signage
that says “For Lease”, “For Sale” or “Sold”.
When you get back to your office check out the history of those properties. Call the owners, brokers or agents to find
out more about each of the properties.
Why would you want to do that?
Well,
for one thing you are looking for pricing information. For instance, how are people paying per
square foot? What are the terms and
conditions? The ones that are for rent
are wonderful indicators, because you’ll be able to piece to together the
income potential for the area.
Number
two, you want understand how the market is appreciating over time. Plus, it is wonderful feeling to discover a
diamond in the rough.
Number
three, if a property is for sale, it just might be up your alley (no pun
intended). And you can start the process
of analyzing whether the property is a good deal.
Now,
that you are starting to get a feel for the area, go ahead and visit the other
areas highlighted on your map. You’ll notice
similar but different transitional aspects of each sub-market you scout out.
This
is where it gets really interesting.
Start to ask yourself why the changes.
What are the reasons for the appreciation or lack of appreciation? Then get your answers from the brokers or
owners you are representing the properties.
It’s
important that you ask these people because they definitely have the answers
you and need going forward. Your
knowledge of the market will give you the opportunity to talk intelligently
about the opportunities as well as the advantages and disadvantages.
The
best part is you’ll start to make some good contacts, and maybe even friends or
future investment partners.
As
you continue driving around you’ll begin feeling more and more comfortable. The process will become easier and you’ll
start to notice the nuances and details.
And then you’ll automatically start making comparisons and evaluations.
Again,
it is vitally important you take your time and take the time to enjoy the
process of discovery.
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