Irregardless of investing local or remote, be sure to choose someplace that’s not only familiar to you, but also a place to which you feel emotionally attached. This might surprise you, as most people have been told that emotions should stay out of these kinds of decisions. I don’t disagree when it comes down to the details, like which specific property to buy, what to offer, and what to fix up, etc. However, in this one case, emotions are important. You’ll be spending a significant amount of time there doing some pretty hard work and putting a team in place to begin with, and being in a location that you enjoy and feel connected to will help. Plus, you’ll more than likely know the area well, which can be advantageous in many ways too. If investing remotely, start somewhere that you feel comfortable traveling to, as you will need to visit the property a handful of times (especially if this is your first flip) to make sure everything is going smoothly and is staying on track. Once you’ve decided on a market, it’s time to look at inventory levels . This means finding out how many homes are for sale in that area/market. Keep in mind that low levels (e.g., fewer houses for sale) can be a good thing, because it means it’s a seller’s market and hopefully your flip will sell quickly! Ideally, you want your market to have less than four months of inventory available. The following are the different types of markets to educate yourself on and to look for: • Hypermarket: Less than one month of inventory; little to no competition. Listings tend to sell above asking price after receiving multiple offers. • Seller’s Market: Less than four months of inventory; low
competition. You will likely sell for a good price. • Stable Market: Four to six months of inventory.
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