We recently climbed into the real estate driver's seat and discovered why real estate brokers and agents use drive time to build their businesses.
Investors also need to turn on superhighways and back roads if they want to find the best deals today. Whether real estate investors are fixing and flipping in their own neighborhoods or buying into large multi-family developments across the country, becoming intimately familiar with a new geography is critical to achieving a healthy return on investment.
Here are four ways investors today are heading quickly down the road to success.
Fly (Metaphorically) First — Then Drive
Finding the best investment opportunities requires taking a birds-eye view of opportunities and growth patterns. That doesn't mean you have to fly a drone over an area (although that will certainly give you a unique and accurate perspective). Stay abreast of the areas that are ripe for appreciation and study the migration and relocation trends. Use technology to assess an individual neighborhood and historical trends.
Let Your Phone Take the Wheel
Rather than driving blindly around a particular neighborhood, you can now use state-of-the-art mobile technology to narrow down the properties you want to see. PropStream's tool actually allows you to zoom in on investment opportunities that meet specific criteria. You not only get property details and comps (and even skip trace information), you can track the distance you travel and save a specific drive for future reference. What's more, you can automatically create a direct-mail campaign based on the properties you identified as hot prospects.
This technology is especially powerful when combined with visual cues. Poorly maintained properties, piled-up mail, and overgrown lawns and landscaping are all signs that a property may be distressed and ripe for a flip or investment.
Get to Know the Neighborhood
If you are investing or fixing-and-flipping locally, become very familiar with neighborhoods by visiting them at all hours of the day and night. Talk to local merchants and financial institutions about what they've been seeing in the area.
Pay attention to the big brand companies that are investing in a particular community. Multi-unit retailers and restaurants have teams of people who recommend sound investments, so by following their lead you are benefiting from the groundwork they've already done.
Count the Costs
Costs of renovations and availability of subcontractors vary widely from area to area. Before you invest in a property, be sure you're correctly assessing renovation expenses and accurately estimating your short- and long-term return on investment (ROI).
Make sure you thoroughly understand the local laws around permits and other regulations that could impact your timeframe and costs. Again, talk to local real estate experts to get a clear picture of what's going on in the community you've chosen for your investment.
Most real estate investments involve an occasional speed bump, unanticipated delays, or other challenges that can have an impact on a project. Driving for dollars helps you bring both your time and technology together to find the best properties and make smart investments.