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 transitionary 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.