Coming out of Lurkdom in the Pac Northwest

[Lillian Mitchell]

Hello everyone, finally stopped lurking and decided to post!

A bit about me - I'm a beginner real estate investor, own one property so far which became an investment property when I moved from California to Washington State. After doing a lot of reading (yes, the Bigger Pockets book!) I've decided to focus, at least initially, on SFR homes in A/B neighborhoods. Given the high prices in the Washington area, I'm looking to invest out of state, currently have my sights set on Houston.

I'm so impressed and inspired by the helpful and knowledgeable posters here. Looking forward to participating and getting to know you all!

[Paul Timmins]

@Lillian Mitchell

Welcome.

Consider networking with several Houston REIA clubs as a way to develop connections and build team.

Get a name drop referral from the Houston Chamber of Commerce president for the local banks.

There are a number of things you can do prior to the site visit to find out about areas.

I have listed a checklist below.

Good luck

Paul

Doin the Due BEFORE the Site Visit

OK, you have presented a LOI; if accepted, you will be doing a site visit. BEFORE you go, you want to do as much Due Diligence as possible. The following are ten steps you must complete before you go.

Google Everything

You will want to find out as much as possible about the property. Google the property name. Check to see if there are any comments or reviews of the property. Google the property address, street and area. Look for any problems or concerns, these may become value plays for you.

Local Police

Check the local police and sheriff websites. Search their online database for crimes in the area. Look for the community policing contacts. Call and speak with them. Tell them you are looking at a property in their jurisdiction. Do they know the property, is it causing problems for them. What do they feel about the area? Is it an area they would want their daughter around at night? Is there a local Crime Prevention group for the neighborhood? Who would be a contact person?

Local Fire

Check the website of the local fire department. Often you have the ability to check for previous fires, chemical issues and ambulance transports. Are many of the calls in the area drug related medical events? Call the local fire station, not the emergency number, when its quiet. Have a conversation with the desk firefighter. Do they know the property? Any trouble with flooding in the area? Do they have problems with the building’s fire alarm? Any underground storage tanks on the property?

Local News

What are the local newspapers? You want the daily, weekly and monthly publications. Check their online articles searching for crime, economic development, job growth, infrastructure improvements, the location and property. If there is a college in town check the college newspaper, and any off campus guides they have. See the area from the students perspective. Check the local business newspaper. See http://www.newspapers.com/ to search for newspapers by area and content.

Chamber of Commerce

Call the President of the Chamber. Tell them you are expanding your real estate holding into their area. What can they tell you about the current business climate? You can say you are looking at a certain property right now. Do they know anything about the area, etc. Ask for referrals, Who do they like and know in the local banks, best Real Estate Attorney, Property Inspector, Property Management firms. Remember you will be getting good referral names as well as their strong name drop.

Economic Development Office

Access the state, county and city/town Economic Development office websites. Draw up any reports on the site which talk about job growth, local support for improvements. These reports are helpful for noting trends and statistics that you can use for your business plan and property package. Call the local office, ask about area development, the specific area your interested in. Are there any local funding sources to access for improvements?

Property Management Companies

Not counting the current property management company, call at least 3 other companies. Have a discussion with them, explain that your company is moving into the area. Do they know the area, the property you are looking at? Is that property something they could manage? Ask what they are seeing for local per door costs. The property manager should offer to drive by and look at the property for you. Their experienced eye will give you a huge advantage.

Shop Competition

Call adjacent properties see what their rates are, ask about their property-any vacancies? Tell them you are looking at the other property, how does their property compare? Call several adjacent properties, you will notice some trends. If the property package lists recent comparable sales, call those properties and gather information firsthand.

Financials

Get the strongest financials you can. If you have presented the offer, they should provide you with more accurate documentation. The rent roll is going to show the vacancy rate and history. Any sweetheart deals, long lease, or noticeably lower rent? Are they short or long term leases? Were a number of apartments recently rented? Discover surprises now not later.

Your Local Team

Line up your local team members. They include: Property Management firms, Real Estate Attorney, local Real Estate brokers, retired banker, bird dogs, etc. Arrange a schedule to meet with your local team members on your site visit. Include the advisors in your team, chamber president, economic development office contacts, local landlord association and local REIA contacts.