Process of Chossing a Target (Farm) Area
Hi all,
Along my journal of starting out in REI, one thing that seems elusive to me is how to go about selecting an optimal farm area in your community in which to locate properties wholesaling. Any and all advice on what to consider, take into account, etc. would be very appreciated.
Also, if anyone has any specific suggestions/ideas on useful neighborhoods in the Seattle area, where I'm from, I'd be grateful for that also.
Martin
If possible, Farm area should be near where you live. You ought to look for areas where working class people would feel comfy living. The area must be away from drug related areas. It must be a good community away from commercial area. you can look at some of the prices of homes bought 2 years back and look at the comps now, see if there has been a great appreciation. If so, you may have a good area. Also make sure the area is between 15-30 years old. No newer ...
Buy a map and start dividing it into grids, then drive around to see if it matches what I explained, if so you may have a potential.
Good luck to you ....
I disagree with hrash on one point, the age of the neighborhood. The age would depend on what time of investment strategies that you are planning on using. A 5 year old neighborhood works well for subject to investing. a 15-30 year old house will usually need some updating/rehabbing to bring it up to today's standards (ie money to spend).
As hrash said, the best areas are neighborhoods/subdivisions for working class people. It doesn't have to be an area that you would want to live in, but it does need to be a place where you would feel safe in if you needed to live there.
Roger
Thanks for both of your excellent replies. Is it more difficult to wholesale in upper-middleclass suburbs?
Martin
One area I have found that does NOT work well are upscale areas that have a lot of infill projects going on. You know, where they tear down the little cottages to build the big McMansions. What happens is that every completely rundown cottage wants to get "lot value". In the areas I've investigated, the numbers then just don't work.
I wasted a lot of time chasing these down these cute, but vacant cottages in great neighborhoods. (Probably would work if there wasn't the infill going on)
I agree with the 15-30 year old neighborhoods as a farm area. I've made
the mistake of sending post cards to areas that are 10 years old. You get calls
from homeowners that are ready to sell
their $127,000 house and you find out
that they owe $130,000 on the note.
It's very rare that you find any homes
with any equity to work with.
Don
Seems like you have a good farm area for short sales![ Edited by tjmarta on Date 06/25/2003 ]