the-abcs-of-real-estate-investing-ken LifeFeeling

LOOK AROUND
Before you seriously target a property, look hard at the neighborhood. I know this from
experience. There are several apartment buildings we manage but do not own. One building,
when we took over managing it, was so full of gang members, drugs, and violence that
anyone reputable was long gone. It was a haven for criminals. Worst of all, it was right in
the center of a neighborhood riddled with crime. Things were so bad that in one apartment I
entered during the site visit there was an M-16 propped up next to the door. Honest truth.
We managed to clean up the apartment community through mass evictions and the
hiring of off-duty city police officers to patrol the property twenty-four hours a day. We
made it undesirable for criminals and slowly good people moved back in. But the apartment
building was all we cleaned up. We did not change the neighborhood. And that’s the lesson.
You cannot change the neighborhood, so make sure the property is in a place that you’re
prepared to manage. As a reminder, you want to be riding the front of the wave, not creating
the wave. There’s a difference. Let the hero be Spiderman.
LISTEN MORE THAN YOU TALK
Listen for the word on the street. The buzz. Not just what the news is saying, but rather
what people are informally talking about. Shop owners, other apartment owners, neighbors,
utility meter readers, cable technicians, mail carriers, UPS carriers, everyone who spends
time in the market. Listen to what the insiders on your team are talking about. Listen to
where they say they are going next. But don’t be fooled by rumors. If you hear something,
verify it with your team of experts and others with opinions that matter. I believe in my
network, and I make a point of keeping in touch with everyone in it regularly. There are
people who I go to lunch with just to listen to what they have to say and to find out what
they are doing. Eventually, you’ll hear about things you’ll read in the papers weeks later.
That’s being on the front of the wave.
JOIN A BUSINESS NETWORKING GROUP OR TRADE ASSOCIATION
Often you can find groups that meet regularly that have similar goals as you. I am active
in the local Arizona Multihousing Association, The National Multi-Housing Council, The
Urban Land Institute as well as in the National Apartment Association and the Institute of
Real Estate Management. These are good places to meet people who might be valuable
additions to my team, to find people I may want to hire, and to stay on top of issues that
could affect my investments.
Search on Your Own or Hire Out?
You can do all this pavement pounding yourself and it’s probably a good idea regardless
of which path you choose to hire or not to hire. For one, you’ll be smarter about the
property you inevitably purchase, and two, it will make you a better judge of properties
presented to you by the broker you hire. But hiring this service out has its benefits.
Brokers will help you find property in your market and will do it on a 100 percent
commission basis. That’s what they do. When you close the sale, a commission is paid,
often by the seller. First, brokers tend to specialize in their markets, so choose one who is a
specialist in your target market. If you make a good selection your broker can be a wealth of