Where to began when learning about your market?

Question

I know that the key to doing well in  real estate is knowing your market. I've been learning a lot about real estate and wholesaling but I'm feeling kinda overloaded with all kinds of info.I was wondering when it comes to learning your real estate market...where do I start? Oh and please don't tell me to just go to zillow and say zillow isn't accurate lol

John Stevenson · Answer

Appraisers learn the market by watching data on listed and sold properties.  Once you pick an area that you are interested in, start examining the properties that are on the market. See if you can figure out the answers to these questions:

Why are they on the market? How long have they been on the market? Are the listing prices going up or down? Are there more foreclosures or "standard" listings?

Answers to these questions will help you gauge what is going on.

Then turn to sold properties and ask yourself the same questions only add:

How long did it take from the listing date to the selling date? Were there any sales concessions? What is the percentage of difference between the sales price and the listing price.

Some of this data maybe difficult to access if you are not licensed or have access to the MLS, so a good realtor mentor maybe willing to help out.

Good luck

PS Investing in the foreclosure market is where it is at for residential investors.

Sharon Vornholt · Answer

Jamela -

I believe that one of the first steps is to decide on an area to invest. This is your "farm area". You need to learn one area at a time when you are just starting out.

Like Danny pointed out, Realtos are a great source of information about a particular area. Once you have chosen your area, go out every Sunday for a while to open houses. You can see first hand what home prices are, and how other homes look on the inside. What amenities do they have?  Have the houses been updated?

When you visit these open houses, introduce yourself and hand the agent a business card (yes you must get cards) . Be upfront with them about being a new investor. Tell them you are trying to learn the area. Agents can help you in a lot of ways. And, it's good to remember those folks when you have a referral to pass on in the future.

Account Closed · Answer

Thanks!

Dale Osborn · Answer

You might also look for demographic information like is the area growing or declining, resident info, income, etc.

check with the Chamber of Commerce.

Create your own survey to distribute in the area of interest.

Hunter Kenihan · Answer

If you want to get into wholesaling its a good idea to find a farm area where the majority of transactions are cash transactions because then you will know that many investors are buying there.  You can then add these people to your buyers list also. If you dont have MLS access a Realtor should be able to help you with this info.

Once you learn the basics and your market you also need to learn A LOT about marketing for deals.  There is a marketing forum on this site.

Good luck!

Karen Margrave · Answer

Jamela Bijoux You have already been given some great advice. I am a licensed agent and contractor, and we develop our own projects. When the market collapsed, we moved from an area where we had lived most of our lives, in northern California, to Orange County, CA, which we knew nothing about!

We needed to learn the various areas and their markets, which building and planning depts. were good to work with, and which to avoid (there's a lot of coastal area, which means lots of red tape before building in some of those areas), plus the real estate market.

After narrowing it down, I would go onto socalmls (it's unbelievable what is available to non members) I could look at properties, and save those I liked. They also send out updates on the properties when the status changes. I could track which areas were selling, and which listings were staying on the market, etc.

I would get the address of listings; and look them up on Google Earth, using the street view feature. It enabled me to rule out many properties. I also went out and looked at properties, open houses, etc. I went by homes under construction to see what you could buy for varioius price points, types of construction, etc.

It took awhile to get the market down to where we are comfortable with the different markets, but it was worth the effort. I now feel confident in pricing, which neighborhoods  will sell, land available, what types of projects we want to develop, etc.

We now belong to MLS, after deciding on which we wanted to join. (there are several here, unlike the city we moved from)

So I guess the answer is, dig in, learn EVERYTHING you can about the type of property you want to invest in, and about the area; and do a lot of homework! ASK A LOT OF QUESTIONS .. Plus... what is listed in the other posts!

Ramon Jenkins · Answer

There also a discussion on this thread regarding arv

www.biggerpockets.com/forums/67/topics/77374-finding-arv

Ramon Jenkins · Answer

Maybe look into this thread

www.biggerpockets.com/forums/12/topics/77458-j-scotts-faq

J Scott initialed FAQ section

Can someone provide an overview of how to analyze an investment deal? 
www.biggerpockets.com/forums/88/topics/51836-the-basics-of-real-estate-investment-deal-analysis

Danny Day · Answer

If you really want to learn about your local real estate market, here are areas where you can learn about it:

- Local realtors
- Local brokers
- Contractors
- Other real estate investors
- Appraisal district website
- MLS
- Home builders
- Sales counselors for home builders
- City-data.com reviews on your city
- Local loan officers
- Banks
- Insurance agents
- School teachers
- School principals 
- City planning department

Start more toward the top ... work your way down. If you hit every point on that list .. or at least half of it, you will know a lot about your market.

Good luck

Kyle J. · Answer

The "real estate market" sounds pretty broad, so it would probably depend on what information specifically you are looking for (i.e. sales prices, rental rates, census data, etc).

How about talking with other local investors and/or visiting a local REI club?

Where to began when learning about your market?

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