Posted by Rob_CA on September 12, 2003 at 11:25:42:
LOL… yeah, I knew I set myself up for that one as soon as I hit the ‘submit’ button!
Thanks for the real answer.
Determining Motivated Seller “Density” - Posted by Rob_CA
Posted by Rob_CA on September 11, 2003 at 23:03:40:
We talk all of the time about finding motivated sellers.
I am still at a point where I am trying to identify target markets to invest in… and since I reside in the Bay Area of CA, I realize that I will need to invest outside of my immediate area, and drive at least 1 to 2 hours away.
Ron Starr – I asked a similiar question as below, and you kindly provided an answer, but after doing more research, including a number of searches through the archives, I couldn’t find a answer to the following…
Can anyone recommend resources to research by city where there is a high “density” of potentially motivated sellers based on historical data? For example, deaths, foreclosures, job transfers, divorces, renters vs. homeowners, etc., etc. This should also be normalized based on the population, like per 1000 people.
Better yet, can anyone recommend a book that discusses this type of real estate analysis in greater detail, and offers suggestions on how to conduct this type of research in your particular area?
Where to invest - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on September 12, 2003 at 10:26:25:
Rob–(CA)--------------------
I’m not sure that you can do what you want to do. I was a researcher for many years. I find that the information available does not seem to be useful to determine the “quality” of locations for investing.
If you are interested in long-term rental holding you will be able to get some statistics on prices of house, value of houses (2000 census), and rental amounts (2000 census). So, you can roughly tell if a locale is low enough priced to be good for positive cash flow with rentals or not.
As far as desperate sellers go, look for someplace where properties are not selling quickly when put on the market. These days that would be Austin, TX, and Atlanta, GA. Then be prepared to compete with the local folk for the good deals.
Much of the CA market will not be easy to work. There are a lot of people like yourself. Live in Coastal CA. Want to invest in real estate. Can’t find many rental properties that make sense on a cash flow basis. Head out into the CA hinterlands. So you join the crowd. It will probably take a while to find a decent deal.
It is not easy being an investor in a high-priced market. Whether that is CA, MA, or NY. It is much easier to be an investor in low-priced markets. I solved the problem by investing in OK, where the prices are near the bottom in the nation.
Where would I suggest to invest? The midwest, the southeast, and the sunbelt, excluding coastal CA.
I favor the sunbelt. Why go into cold climes? Unless you have lived in such places and know what to look for. There were some investors from the San Fran Bay Area a few years back that bought a bunch of houses quickly in the midwest. Then they found that the agents were putting them into properties with inadequate and obsolete heating systems. Oh-oh. They didn’t understand the importance of the cold weather in the winter.
Good InvestingRon Starr*********
All motivated sellers are dense. - Posted by js-Indianapolis
Posted by js-Indianapolis on September 12, 2003 at 02:12:32:
If they weren’t, they’d just list and sell the house themselves, or have a realtor take care of it. Any house will sell fast for the right price.
Oh, you want a real answer, I suppose. Sorry. I couldn’t resist.
I’ve found some of this information through some of the online Census sites. I don’t know the link, but finding the right one the info will be free. There will be 90% of the others who charge a fee. I found renters vs. homeowners there.
For much of the other information, I’ve gone to my local real estate board’s website. The foreclosure info is simple to find around me, as Indy is leading the nation. They seem to know how to bust out statistics on it, but not fix it. If you can’t readily find the data online, maybe calling the courthouses and asking just about how many properties show up for sale each week. I know in my county we get about 10 a week (north of Indy). The county Indianapolis is in gets nearly 100 each week.
Job transfers? Who’s a big employer nearby? Are they the standard white collar, reorganize every other year? Maybe check with the RE board again for the average number of years people stay in their home.
All this info can be found, as I did it when I got started. However, I can tell you much of what you need to know is going to come from digging, and keeping your eyes open. It’s not readily compiled in any one place, from what I’ve seen. Read the local papers, and network with those in the RE community. A RE club, I think, is the best time you can spend for your career. In time, you’ll find it.
If this doesn’t do it for you, just pay an information service (the ones who sell mailing lists) in your area for the data. Just be prepared to drop some good $$ on them.
Getting ahead of the crowd - Posted by Bryan-SactoCA
Posted by Bryan-SactoCA on September 12, 2003 at 17:50:50:
Ron, you make a good point that all the real estate newbies from the Bay Area are coming to places like Sacramento (where I live) and paying obscene prices for fixers thus distorting the market and making it hard to work a flipping business like say Steve Cook recommends. Since moving to Atlanta, Austin or Tulsa really isn’t an option for me, I would like some recommendations on standing out from the crowd and finding motivated sellers who will sell cheap. One idea I saw here was to approach potential sellers in person whenever you can. Since I have a lot of time, I could do that. I don’t have the money for mass mailings and I’m willing to bet that most of those carefully crafted postcards go right into the trash. Anything else I should be thinking of-sources of sellers that aren’t mentioned in every seminar and such?