part of town to farm

General Real Estate Investing
1

Newbie incoming… :slight_smile:

I’m planning to start buying houses. I’ve read that I need to select a part of town to “farm”. What goes into that? How big does it have to be?

Thank you!

2

If you want to limit the areas you buy in you could “farm” by using bandit signs, flyers, door knocking, letters etc.

The area you farm can be as big or small as you want. The key is finding “motivated sellers” and if you limit yourself to one neighborhood or certain area you might not get very good results.

You need to define your “niche” and then go from there.
Do you want to market to pre-foreclosures, Divorce, absentee owners, tired landlords, vacants etc.

Hope this helps

3

To add to aznewbie’s post, the “real deal” with farming is all about getting to know your market area cold…! When a property comes on the market in your area, do you know it? When a property comes available in your area, is it a bargain? Is it overpriced? You have to have a strong appreciation for your market and the value of properties that it contains. I can drive through my area, see a new Realtor or FSBO sign, do some moderate research and tell whether the property bears further investigation. I also know what the property is worth (at least to me) based on size, location, school district, etc. and what it will rent out for…

YA GOTTA KNOW!

Keith

4

Good advice Keith,
Do you live in a small or big city? Mine is not huge, but it’s definitely not small either and I don’t feel like I’ll ever be able to really know all the areas. I mean I do know where the bad, good/average and very good areas are and basic price ranges but nothing specific.

5

Small two city area (one city on each side of the river, both in different parishes) but more or less like a single city. But, I only invet in the parish that I live in – better schools, less crime, etc.

Keith

6

Thanks aznewbie. I think you are right about picking a niche to market to. Keith, thanks for reinforcing that there is no substitute for learning your chosen area(s).

I’m in the Austin area, so there is a huge variety of neighborhoods to choose from. I figure I need to buy where MV is below the median house price and the location is close to my current residence.

Should I be thinking more in terms of which areas are booming regardless of how far a drive? I guess I am worried that I will pick a neighborhood that doesn’t appreciate well (compared to others) or actually declines.

Thanks

7

I THINK “purchasing in terms of which areas are booming regardless of how far a drive” depends on what type of investing you’ll be doing, like buying and holding or reselling immediately. I’ll let someone with more experience give advice for this!

I personally would prefer properties close to me also but I’m in about the center of Tucson so it’s not too far to go either way.

8

I mostly farm from Kansas to Utah and Wyoming to New Mexico! Right in that big square area we call Colorado!

9

LOL, Yeah but you’ve been doing this for a while, we’re just starting!

10

I live in the detroit area and the market is on its face! what and or how do you make money in a flat market with more jobs leaving that comming, the only farming going on here is furtilizer

11

reoconsultants-

That is awesome but hard for a newbie like me to fathom. How do you decide on a long distance deal-- purely based on comps + public records? How do you size up the area, make the deal work?

Thanks…