Indiana Joe's Guide to Tracking Target Market Areas

...In the past day, I have been asked how I go about tracking my local target market areas to find good deals on real estate. I believe one of the biggest challenges that new investors run into is to determine what actually makes a good deal. This comes down to knowing your target market. I hope the following information provides a few good ideas on how to learn your target market.

In some cases, if a new investor sees homes in their target market area they are not sure what to offer to make the property a good deal. What you need to do is to truly become a student of your local target market area. Do not memorize the information, really work hard to understand the information.

I believe, you need to know and begin to track:

- What price range homes are in their local area
- What price points are selling the best
- What are the average days of homes on the market for each price point of home
- What are the comps sales for the past 3 months within that area

This is what I recommend:

Key a separate file folder on each property you look and run the numbers. You can buy those 10x12 yellow envelopes from an office supply stor like Staples. They put the envelopes in a storage area like a Ribbermaid storage tote bin. Sort these eneveloeps by by address.

If you view a property or go to an open house, take digital pictures and save the pictures by street number and address. Review the listings in your target area on-line each day to determine what is selling at what price and what new listings are on the market. There will be properties that boomerang back onto the market.

This information is helpful for a number of reasons. If another investor buys a property and rehabs it, you can the see what they did to the property and what they are asking for the property after the rehab. You can then also get the comp from your real estate agent about what the home first sold for. The more information you gather on an area the better decisions you can make.

The old adage is so true here, "you make money when you buy not when you sell." What this actually means is that you have a greater opportunity to make a profit if you purchase theproeprty at a low enough amount. Always know you exit strategy of what you will do with the property iof you lock it up under contract. The greater the profit potential, the more options you will have.

Over time you will become familiar with what is on the market and what is selling, how long it takes to sell and at what price. Its liek shopping at the grocery store. You don't memorize the prices but you knowa good deal when you see one, right?

This information is critical because you will know more about your local area than most real estate agents. You will begin to develop the eye for what makes a great deal and at what price! Good luck, go get some of those great deals! Believe and Achieve! - Joe