Preliminary market research
Deciding where your market will be grown can be approached in many ways. Presumably, where one lives in the United States usually sets the cornerstone, and the rest follows. For example, someone who lives in Florida may prefer to focus their efforts on the southeastern region of the United States, rather than someone in the Northwest who may find the Portland or Seattle markets more to their liking. It could also be said that the market itself will dictate where the activity is, and as such someone living in Iowa City may find themselves looking at markets that are a long way from where they live. Many speculators, investors and fins will literally travel to the ends of the earth to penetrate a market and initiate investment candidate opportunities. You could call these people equal opportunity fins. Being away on a plane trip is no obstacle for a truly dedicated investor who enjoys both the hunt and the chase.
In terms of preliminary market research, I recommend focusing on the markets that offer the most apparent advantage as estimated by bona fide news accounts and real estate data. As a web source, try HomeBuilder. com and NewHomeSource.com to get started. Both sites will give you access to all fifty states and developer activity in those respective areas in terms of specific builders, sites, locations, and cities, and what kinds of houses and how many houses they are building, and prices. You should also use the myriad of websites that offer free, in some cases, lists of pre-construction opportunities in various parts of the country. Just type your keywords into a search engine and you’re done. In terms of a paid membership, don’t avoid those services too quickly. Organizations like NREIA (National Real Estate Investment Association) and REIClub (Real Estate Investment Club) are well worth the nominal registration fee. I can’t underestimate the importance of leads, leads, leads!
This will be the lifeblood of your business, and hopefully the latest organizations and sites we just mentioned will get you started in the right direction. However, keep in mind that not all pre-build cables are the same. Brokers, developers and unions take advantage of these websites, clubs and organizations to remain “inventory neutral” and as a result, the pre-construction opportunities they advertise may not be paying off. In addition, the offers presented on the sites may not be geographically located within a market that is on an appreciation trajectory that meets the parameters of a quick offer. So be sure to do your research, research, research before you buy.
During the investigation, you may run into some obstacles. For example, there are some markets that are clearly anti-investor. This literally changes depending on whether it is a buyer’s or a seller’s market. In a seller’s market, you will tend to find that builders are quite tight on investors. On the contrary, in a buyer’s market, things are turned upside down and the sellers / developers are much more generous and welcoming. Although there can be many legitimate reasons why a home builder will not sell to investors, many of the explanations are not good and do not make sense. It is a well-known fact that investors are a hidden supply, where you can always count on them to buy, but some builders refuse to sell homes to investors and / or limit the number of homes per development to a specific allocation for the investor activity. . My experience is that many builders will not allow investment because they are not investors themselves. Those vice presidents down to the regional level are parsimonious and educational with investors. So a form of “buyer envy” sets in and just old jealousy dictates a “no investor” policy. No matter what the reasons are, investors are forced to “lick their salty wounds” and their ego and take advantage of other regional markets – with their checkbook in tow – that are investor-friendly and welcome their trading.