There are quite a few real estate investors, both beginner and veteran, that fail to understand the true benefits of soliciting sellers in small target areas. In fact, some investors aren’t exactly sure how to determine what areas to target. Here are some quick ideas for target area choices:
- We can assume that a great place to cultivate a farm area is where we are getting the most responses from current marketing pieces. This requires a bit of performance tracking but I will save that for another post. If sellers in a specific area seem to be more receptive to the ad campaigns you are using than sellers in other areas; go for broke. There is no need to spend money and time on dreams when you have deals staring you in the face.
- Go to a great online source and purchase a state-wide foreclosure list. Look for the area with the highest concentration and target that part of town. This is a neat trick I learned when I first got started in the business.
- You can decide to target new subdivisions or new construction areas because you seek to provide sellers with instant debt relief. Warning: Buying in these areas requires a certain savvy on negotiating terms.
- Military Bases or neighboring developments to military bases are strong target areas for real estate investors. It isn’t a secret that America’s finest do quite a bit of moving and most of the time their mortgage products are in the form of VA loans. These types of properties are right on time for investors that are hip to buying with no equity or negotiating short sales.
One may ask, “Why a small target area?” My answer is, “why a large target area?”
For the sake of this write-up, I will use my favorite neighborhood in Washington, DC: Deanwood NE. Deanwood is full of 4 bedroom 2 bath raised ramblers with basements ranging in value from $279,000 to $324,000. I would consider myself an expert on Deanwood real estate. You could be an expert on properties in Deanwood as well if you pulled comps for the subdivision on a daily basis. This supports what I would consider to be the greatest benefit to a small farm area – being an area expert.
If you invest in a small area; by default, you become the go to guy or gal when it comes to investing in that particular subdivision. It is much easier to reach 1000 homes 5-7 times than to reach 5000 homes 1 time. Sellers will see you as the ONLY choice for their real estate needs and that is the notoriety that an expert should expect. When targeting a smaller area, you can easily oversee projects, manage properties, time-block efficiently, avoid new relationships, keep tabs on competition, and literally specialize in that area. Believe me, if you want to take over, this is how it’s done.
Blessings to Your Real Estate Investing Business,
Milton B. Yates