Investment Property

Many people are going outside of their own market to purchase quality real estate investments at a fraction of the price. Did you know that for example a $400,000-$500,000 home in California is similar to an $80,000 home in Dallas, Little Rock, or Memphis? Did you know that the rent on a home that price can be as high as $1000 per month or more?

Your peers are buying properties in these other markets, getting a lot of cash flow for their money and are racking up a diverse portfolio of assets quickly. Are they geniuses? Are they better real estate investors? The answer is no. Many of these people stepped outside their comfort zone, took very little risk, and now are reaping the rewards. How are they doing this? Let's take a look.

1. Taking advantage of Markets - First, real estate investors in markets that had a large run up in prices in many cases are hurting now that the appreciation is gone. The savvy investors from these markets are looking outside and they are looking for positive cash flow. Many markets in the interior of the US, especially the South, are not only growing markets but have had depressed prices for quite some time. This is a better angle to look at then for example a rust belt city in the Midwest with a declining population and factories closing up. Look where the economic growth is and the prices have been low. Example: Memphis, Dallas, Little Rock, Atlanta, Birmingham, Montgomery, and others.

2. Do your homework - Look online and find local Real Estate Investing Associations. Try www.nationalreia.com and look for associations in your target market. See if you can access the forums section of their websites. Who are the movers and shakers? Who is buying and selling a lot of property? Then look at other sites such as Craigslist in the same market. Do you see any correlation? You should see some repeat names, similar deals, etc. Use this information to start evaluating homes. Next, use Google, Yahoo, MSN, others. For example: if you Google the following, what companies surface: sample city, real estate investing, or sample city discount properties. Look for reputable companies that are selling properties. If they don't have an established website, stay away. Typically people that are one man shows don't have a good support staff.

3. Interview to build a real estate investing team - After searching on line and finding out who is buying and selling a lot of property, make a list and interview them. Find out who their support staff is. Does this buyer and seller work specifically with rehab crews? How about management companies? Closing Attorneys or Escrow Agents? You should interview 3 of each of these or more. Be brutally honest. If you can tap the wisdom of a team, the process of owning property outside your area can be easy. Make sure the management companies are willing to work with the real estate investment contractors, the sellers of your property, and so on. Ask about the reputations of each to the others.

4. Book a Flight - Make a trip to your new market to meet your team, go out into the streets, look at available property, and see everyone's office. This will often be the true test. It is easy to create a false online front, or a front over the phone, but very difficult to cover up after you show up at their doorstep. Spend 2-3 days in your market. Look at all the neighborhoods the wholesalers or agents work in. Make sure they aren't going to sell you war zones. Ask them about the rent ranges, rehab estimates, time to rent, etc. Verify these numbers with the management companies and contractors. If all checks out, proceed. The right team of people will come to light.

5. Buy and start slowly. Many people will try to push you to purchase several properties at one time. By a property or 2 within your risk threshold and see how it performs. If it performs well: wash, rinse, and repeat. You've uncovered a new real estate investing market! Hopefully you had a little fun and explored a new area too.

By using you too can profit from real estate trends taking place in undervalued markets all over the US.

To find out more about the author and investing in real estate to create passive income, visit Ryan L. Hinricher, Co-Founder of The Feol-Hinricher Companies at http://fhcompanies.com He and his partner Robert C. Feol have been investing in real estate and educating investors that are looking to profit from undervalued markets.

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