I often get asked about what tools I use for analysing various investment: for example, businesses, stocks, or real-estate.
Today, let me tell you a little about a very useful on-line data service that I use (and, you may have at least already heard of) called RealtyTrac … if you are an aspiring real-estate investor, this is definitely one of the tools that you will want in your kit-bag.
RealtyTrac is an on-line database, primarily known for listing foreclosures, but it also offers so much more:
Real-estate of all types (from homes to huge commercial developments); Foreclosure listings across the country; For Sale By Owner (not as many as the MLS, but you will find quite a few); Bank-Owned; and, Pre-Foreclosure.
The last two are the ones that you want to get into, because foreclosures can be difficult (often auctioned and you can’t be sure about title etc. before you buy) and because these last two are more like ‘normal’ purchases …
… that is, you can plonk down some refundable earnest money and do your due diligence before you buy. The rest of the sale process is somewhat similar to any other real-estate sale, but at generally ‘distressed’ prices … at least, if you are patient, selective, etc, etc.
For example, right now, I have set RealtyTrac to look for commercial property – retail, office, industrial, apartments – in the $1 mill. – $3 mill. range.
I have asked it to show me real-estate within the geographic areas that I am currently interested in, and of those last two types (i.e. Bank-Owned; and, Pre-Foreclosure).
I have recently added For Sale by Owner, because in the commercial sector 99% of owners will still have an over-inflated view of the real value of their real-estate, but 1% may have an under-inflated view (they may not have really researched the market; they may have under-managed, hence under-rented their property, etc.) …
… But I also have some pretty specific financial criteria that whittles down the hundreds of properties that may be within my nominal range … I will be happy to share these in a later post if enough people want to read about it.
I think RealtyTrac costs about $35 a month, so you need to be serious about buying before you signe up … but you can start a free trial if you just want to ‘kick the tires’.
Be warned: they take your credit card so be sure to call up and cancel before the trial period is over and they automatically start charging you!
Would definitely be interested in reading the specifics that whittle it down further.
I’d also be interested in seeing what you initially started out looking for as I doubt I’d have the ability of Friends/Family/Fools to fund me doing more than I can finance myself at this point. Have to get all my ducks in a row, you know? Although I can surely do research for others who can get into this – for now. BUt I would prefer to look in a “beginner’s market.”
I have heard how properties in foreclosure come with too many risks unless I can do a lot of the work myself (e.g, holes in walls, concrete in toilets), due to anger of those being made to move. Bad mojo I think – leave it for another to deal with.
… one bite a time 😉
Yes, foreclosures can be risky … so can buying tax-defaulted real-estate … rehabbing and flipping … and a myriad of other ‘real-estate trading’ techniques. On the other hand, taking on at least SOME Controlled Risk is a key Making Money 201 concept that we will explore further in upcoming posts.
I’ve been thinking about expanding my real estate investing ventures (from almost nothing to something) now that it looks like the real estate market might be returning to normal. I’ll have to check realtytrak. Hopefully i can use a temporary credit card number…
Good luck, Dong … hopefully, this – or soon – will be a GREAT time to start (no promises … and DO YOUR HOMEWORK). To help cushion any purchasing mistakes, put in a reasonable deposit (say 20% on residential; 25% or more on commercial) and try and lock in the current low interest rates for AS LONG AS YOU CAN!
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