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What Type of Property Should You Buy?

Property

This is one of the most common questions that I get when working with new investors, and I guess that it is to be expected. Not only are there a lot of different types of properties out there, but there are also different strategies and pros/cons to each strategy. So in this post I will attempt to provide some criteria for how to answer this question for yourself.

What Are Your Goals?

I believe that everything comes back to your individual goals. There are many different types of properties and strategies out there, but unless you know your goals it is difficult to know which one to select. So start out by figuring out your goals.

Related: Tips for Achieving Your Goals in 2014

What is Your Strategy?

Once you have your goals established, the next thing is determining which of the hundreds of strategies you could utilize to achieve your goals. Some strategies are more active, such as wholesaling and flipping. Others are more passive (but still require work) such as buy-and-hold or tax lien investing. Narrow down the strategy or strategies that will contribute towards achieving your goal.

What is Your Location?

Sometimes this step can come before your strategy, sometimes it can come after. In my case, my goal was to generate monthly income to cover my expenses to allow me the freedom to make decisions without having to worry as much about the financial impact. My strategy to do this was to purchase buy and hold properties. So my next step was to find a location that would fit my strategy.

One of the first things that I did was to lay out my criteria for a location. These included things like:

  • Within 1 hour of driving
  • Steady/increasing population over the past 10 years
  • Multiple businesses locally available offering jobs
  • Purchase prices that allowed positive cashflow

After I had my basic criteria, I grabbed a map and created a circle of my target area. I then took towns (Zip Codes) within the circle and plugged them into City Data to get information and population trends for the zip code. Any that did not have steady/increasing populations got removed from the list.

I then created a spreadsheet for each Zip Code. I followed rental ads (either in the newspaper or online, whereever landlords advertised properties for rent). At the end of the month I analyzed the data and asked the following questions:

  • On average, how long were ads in the paper (how long did it take to get a place rented)?
  • What is the average rent for a 1 bedroom apartment? 2 bedroom? 3 bedroom?
  • Were apartments offered single family houses or multi-units?
  • What were the “norms”? Ex. Were pets allowed? Were utilities included?

Once I had this information, I then began looking at properties for sale. I used a spreadsheet to quickly evaluate these properties. At this point …read more

Reading Between the Lines: Understanding Your Real Estate Buyers and Sellers

Understanding Buyers and Sellers

Welcome back,

As real estate investors we often have to be quick when it comes to reading people and making decisions about our buyers and sellers. While it is necessary, in this author’s mind, to be caring and honest with people you are dealing with it is also warranted to protect yourself from loss of time and mental energy strain when dealing with the public.

I heard a quote that says, “How you do anything is how you do everything.” What a perfect quote for this article. Below are a few examples to be aware of that can show how people really feel without them telling you anything. It is true that, in most cases, actions speak louder than words when it comes to conveying people’s real feelings and traits.

The examples below are not based on any scientific data and are only this author’s opinion based on a decade of investing. If you disagree or would like to add any examples for us all to learn from please comment them below.

Keep both eyes open during your first few meetings or phone calls with potential buyers or tenants. Your B.S. detector should be on high alert during these times. When dealing with buyers and potential tenants they “should” be on their best behavior with you. Be aware of over friendly or disrespectful attitudes, profanity, and worst of all excuse-syndrome.

Let’s break down these behaviors…

Over friendly or disrespect attitudes from buyers and/or potential tenants: A buyer or potential tenant should have the idea in their mind that this is a business relationship. If you are being called sport, champ, boss, buddy or pal I advise to quickly correct this before moving forward. Ideally a yes sir/no sir or yes ma’am/no ma’am attitude should be used by your clients. Please note that this casual attitude is not a good or bad thing, however it may show a lack of respect for you and your role as landlord and seller.

Profanity: Street slang and profanity can tell you a lot about a person. If, on your first occasion, your applicant is using slang towards you or using profanity in front of you towards others or their children then be aware this will only get worse. While using profanity or common slang does not solely group a person as definitively one way or another it does show a lack of respect for your role as landlord or seller.

Excuse syndrome: Be on the listen for a victim mentality and excuses in your future buyer or tenant. If you hear excuse after excuse then be prepared that this will only continue when trying to collect your monthly payments from these sellers.

No call, No show: Buyers and sellers are finicky and wishy-washy. If a seller or buyer has not called you back concerning your offer they have given you an answer already. A no call often means these once interested parties are likely no longer interested in your home or purchase offer(s). This may not always be …read more

Mailboxes Etc. In Puerto Vallarta

  Mail Boxes Etc. – Puerto Vallarta Centro Located at Rivera Molino Plaza Local 3 Ignacio L. Vallarta 130 Local 3, Col. Emiliano Zapata, Puerto Vallarta, Jalisco 48380 322.222.2252 / Email mx0137@mx.mbelatam.com If you are contemplating or have already made the big decision to move to Paradise, what will you do about your mail?  What …

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Puserto Vallarta Side Trips

Looking for an adventure that won’t take you too far out of Puerto Vallarta but still give you the feel of having a wee vacation? Here are four suggestions of destinations you can reach by bus or car. Aside from the usual trips to places like Sayulita and San Pancho, there are wonderful gems along …

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Puerto Vallarta: Thursday Marina Market

Thursday Marina Market We love to take a Thursday trip out to the Marina in high season. The Marina Market was once a small shopping experience that we enjoyed before dinner at one of the fine marina restaurants. We would buy some vegetables and sometimes pick up bread or sweets from one of the bakers. …

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Puerto Vallarta Living: Vegetarian Options

Vegetarian Restaurants Many years ago we were delighted when Planeta Vegetariano opened on the north side of Our Lady of Guadalupe Cathedral. It was a great choice to treat our vegetarian friends and at the time it opened, there was nothing like it in Puerto Vallarta. Their buffet had a great variety and the place …

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Dogs and Thunder In Puerto Vallarta

Dogs and Thunder It’s called Strom Phobia and our pup suffers from this horrible affliction here in Puerto Vallarta during rainy season. We always know when a storm is brewing because the pup starts the panting/pacing ritual that precedes thunder and lightning. Pup seems to want to be on top of us, or maybe inside …

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Vallarta Inspired Living News: Ajijic

Ajijic For those looking for a nice adventure out of town while the temps are still high, we recommend a trip to Ajijic, a quick ten minute drive to the west of Chapala on Lake Chapala. With a population of approximately 12,000, Ajijic has moderate traffic and climate. What’s not to like? About an hour …

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Puerto Vallarta Customs or Aduana

We had the delightful (cough, cough) opportunity to make a passage through Customs (Aduana) in Puerto Vallarta recently and observed some of the do’s and don’ts. (Smile) Our experience took place at the airport and we thought it mind be kind and thoughtful to share what we have known for years. We, most of us, …

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What To Know About Your Local ATM

ATM’s and How to Use Them This question arises again and again about how to get cash in Puerto Vallarta, and we do periodic updates to keep people in the know. The best way to get cash is through an ATM. The peso will fluctuate throughout the day with global markets and you get the …

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Vallarta: Jelly Fish Remedies

Jelly Fish The ocean water in Puerto Vallarta is visited by jelly fish seasonally. Whereas some types of jelly fish are indigenous around the globe, we are simply a tourist destination for a couple of the species, some harmful. What do they look like? If you see a gelatinous blue blob on the sand while …

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Puerto Vallarta Inspired Living News: Revolution Day

Revolution Day in Puerto Vallarta It will be a long week of celebration in Puerto Vallarta this year for Revolution Day, with banks closed on November 18 and 20, schools being given the holiday, and some businesses taking the days to close and relax before the high season is upon us. Some will even turn …

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Help Means Jobs In Puerto Vallarta

Friends who recently moved south for the winter have begun to settle into their new homes and several more are on their way. These people have begun to realize the benefits of south-of-the-border living in Puerto Vallarta and shed the fears that had been created by clever media. Shopping was a challenge until they realized …

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