Hello DG Family,
In the past I have received questions on how to get started with real estate investing or what I look for to spot a great deal in my area. It can become a little overwhelming if you do not start out organized and have a plan of action.
As with any new endevour, it is key to start with a good foundation of knowledge. Dean's books and programs have given me the knowledge and the inspiration to put togther my plan of action for my area. Your plan can differ depending on your local area and your aspirations in real estate.
I looked at various communites in near my area and I had to determine where would be a good place to invest. There are communities with the average home selling for under $50,000 and those communities with homes selling for over $350,000. Thus, I picked the average family home value and an area that was close to everything with other things to offer such as employment, recreation, etc.
Here is the guide that I put together and I use:
1. Determine the home prices in several areas that are close to where you live and which may make for a good deal.
2. Determine what areas you would like to invest and where there may be some opportunities based on the current prices of homes.
3. One way to separate areas is by zip code, size of homes, age of homes, etc. Your agent can sort the list with whatever detail you desire. If you are not sure of the sort options ask your realtor for a list.
4. Determine your price range for investing. Note your price range could be a little higher because you are going to offer lower than the asking price. I enjoy looking in the $75,000 to $125,000 range. The average nice ranch style home is around $100,000 at this point in time.
5. Contact your real estate agent and get all the current listings in your desired area. Ask for the agent to include all the information such as days on the market and price reductions.
6. Also request your real estate agent to run all the comps of homes that sold in the past 6 months in your desired area. If you do not get as many sold properties have them go out 9 months to one year. Just make sure you track when homes sold and at what price.
7. Next I track all the homes on the market that are in my target areas under $125k. I then ask my real estate agent each month to print off a report that shows what homes sold and how much going forward. I am also intreseted in the number of days the proeprty was on the market (DOM).
8. Stay organized with all your print-outs and information. You may want to put them into a folder for future reference or use. ASs you drive neighborhoods save fliers from FSBOS for future reference.
9. After you do this for several months you get a feel for what the homes are seling for. It almost is a game when I see an under priced home because I believe it may sell fast. If it does sell fast it confirms my feeling on the market.
10. Let the adventure begin - Watch the market, determine your exit strategy for each offer you want to make and then make offers and hopefully close or assign a lot of deals. Repeat often!
Good luck with tracking, finding and closing on those deals. The key is to have an organized plan of action and work your plan each day. Be sure to share all the details or other tips and techniques with the DG family. Believe and Achieve! - Joe
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Joe Jurek CPA