By: Brian and Tina Merryman
Old McDonald had a farm and on this farm he had single family homes; detached, middle class income earners and quarter acre lots.
Basically, the farm was specific; Farm De La Niche'!
When we were told by our coach in the beginning of our real estate investment journey to choose our farms (or submarkets) we felt overwhelmed.
We thought, "How about the entire country?
If a house needs help and the numbers work; great!"
He explained that without an identifiable sub market or two, we didn't have a niche' or at least a focused target area to run things like a business.. That meant, we didn't have a real plan!
Hmmmm.... ok, coach. Go on.
First, coach explained why we wanted to focus on particular income areas, types of neighborhoods and types of housing. For example, no after repair values that compete with new builds or high end luxury homes and on the counter... not in the ghetto!
Then, he explained that we needed to invest in transitional areas; areas that have established homes yet are in (or border) a growing and desirable area.
Then, we started to zone in. We were mowing the fields so to speak for our niche' farm!
We didn't want to compete with new builds and we didn't want to invest the ghetto. Check!
We weren't interested in townhouses and condos because so many new one's were being built. Check!
We wanted to be the company who remodeled distressed homes into dream homes for the end buyer who couldn't qualify for a new build mortgage. Check!
Okay. Next, how would we identify the transitional areas?
By actually researching the area's development!
We needed to pick our own city for now and focus around that!
Many novice real estate investors have no clue what projects the city or county have planned for their area. You don't have to join the Chamber of Commerce. Make some phone calls and/or get on the internet. Most of this development is public information and usually has easy to find, full articles and development plans available for you at the click of a laptop!
Once you are able to identify what development is happening and where, then you can identify the neighborhoods that tie these all together. The area will be transitioning and therefore so will the surrounding neighborhoods!
For example, are there major corporations coming into the city or county where you invest? How about hotels, warehouses, hospitals, schools, shopping centers?
Anything expanding? Military bases, universities, headquarter's, roads?!
Are their plans for improving or expanding transportation infrastructure?
What about community? Any parks, recreational facilities or gathering centers?
Learn where money, business and people are headed and invest strategically around this.
Best wishes to you and your transitioning farm. Eei lei oh!