Desire & Determination
Why do you want to own real estate? That’s the first question you must ask yourself before you embark on this journey. The answer that you come up with will carry you through some of the difficult moments that may/will arise.
Here are several reasons why people become real estate investors: Money, money, money, and a little bit more money. Anything other than this would probably be a lie. I say this because it is a true motivating factor. However, as real estate investors make money, they can serve several indirect purposes. They can provide housing for people. Create jobs and provide work for skilled and unskilled laborers. You can improve the living conditions of other human beings, and significantly improve neighborhoods as a whole.
As a real estate investor you may not be able to save the world, but you can make positive contributions to the lives of others, while creating wealth for yourself.
Capital and Start-up Money
This is the part of the process where most people put their thumb in their mouth. Really, that’s what we do when we don’t have a clue where to come up with a significant amount of cash. A lot of people, if not the majority of folks, don’t have much money in savings. Unfortunately, this is going to be the first steps in becoming a real estate investor. YOU MUST SAVE MONEY BEFORE YOU INVEST. Before you close the page, or go to another site that tells you it is possible to buy a house with no money down, consider the possibility of buying houses for as low as $1,800.00. They are out there, and they are listed.
Also, if you don’t have 10k or 15k socked away in the bank today, consider investing in real estate when luck, or a significant sum of money does come your way. Money can come in the form of an inheritance, a law suit, or gift.
Finding Properties
Since this article is focuses on finding properties here in Jacksonville, Florida, I will offer several listing services that are free and highly efficient for finding local opportunities.
The first is Exit Real Estate Gallery. Their filters allow you to narrow down your search to your very detailed specifications. You should become familiar with the site, and look at it regularly.
The second is Zip Realty. This is just another listing service where you can find additional properties. Remember, you want to play with the filters to sort through the hundreds if not thousands of properties that are available.
Thirdly, I encourage you to use listing services such as Craigslist to find other relevant and interesting deals.
Lastly, this one can be a bit simple, but just keep an eye out for properties that are in your own vicinity. These may be abandoned, dilapidated (hopefully not horribly so), run-down, vacant, properties for sale. This is really where you’ll make most of your money.
You want to be able to close on a property and secure thousands, if not hundreds of thousands of dollars just by purchasing on that day. This is highly doable and it is NOT ROCKET SCIENCE.
Evaluating Properties
In order to find out the true value of a piece of real estate, you must get something called an appraisal. Instead of paying for an appraisal, there are several tools to assist you in determining the value of the property you’d like to buy. Now, this does not mean you will not obtain a formal appraisal, but it will give you an idea of what the local municipality believes the value to be.
Duval County Property Appraiser:
The property appraiser is the first stop in the quest for property information. Here you will just type in the address and see tons of valuable data about the property you are thinking of buying. You can see the year that it was built, the appraised value, yearly taxes, and the type of materials used to build the property. This tool is highly effective, as it can alert you about potential hazardous building materials, such as asbestos, contained in the property. Study it carefully. You can call the property appraiser with any question you might have. Click here to visit the property search page of the Duval Property Appraiser’s website.
Zillow:
This site is helpful, and will show you the value of the surrounding properties as well. Study it carefully, and consider it in your decision making process. Click here to visit Zillow
Trulia:
This is site is also helpful, but it seems to low ball appraisals. This is quite ok, as banks will normally low ball their appraisals in order to protect their investment. Click here to visit Trulia.
Jacksonville Sheriff’s Office (JSO) Crime Statistics page:
This is site is critical in making an informed decision about whether or not to buy a piece of real estate.
Why use this site? It lets you analyze crime in the erea that you’re thinking of buying. Just type in the addres, and the date range. You can go back ten years or more. This tool allows you to determine if crime is increasing or decreasing. Click here to go the JSO crime statistics page.
Tip: I like to compare my current location (where I live) to the statistics of where I’m thinking of buying. By doing this, I can determine how safe I currently feel where I live, versus how safe someone would feel in the area I’m thinking of buying.
Duval Schools: You want to know which schools the children of your potential tenants will go to. The Florida Department of Education and Duval County Pulbic Schools provide statistical ratings and assessments of how well the schools are doing. The better the schools, the better chances of renting the property to someone with children.
Rentometer.com
This website is helpful, as it will give you an idea of what you can charge in rent for that particular property. If the numbers don’t make sense, then the purchase won’t make sense either. This is a very important part of the process, especially in the case when you are leveraging (mortgaging) the property. You want to make sure that the property will generate enough to cover the loan payment, and if you do it correctly, make a profit each month.
Purchase:
If you made it this far, then you must be pretty convinced that the property you chose is a very good deal. You should know how much to expect in profit, and have a pretty good idea of your risk. Remember, there is risk in everything you do. That is why not everyone will venture into the world of making money.
This is the time when you contact your agent or listing agent and ask to see the property. When you arrive, or get near, you want to evaluate your surrounding and the properties in the area. Look for things like, access to public transportation, vandalism, or potential risks. Imagine that this is the same trajectory that a potential tenant will be exposed to as they are driving to look at the property. Chances are that if you are turned off, they will too.
Once you get to the property, you want to make sure that you announce yourself when you enter. Yell something like, “property inspector”. You want to do this in case that any delinquents or squatters are inside of the property. This could save you from have a serious confrontation with someone who has nothing to lose.
Tip: I like to bring a nice metal crowbar whenever I go see properties. This comes in very handy because it serves as a weapon, and a good tool to test the strength of wood, and other materials.