Ready To Buy?..........OK, Now What? Cont...

Part 3 of 3

Where you buy is as important as what you buy in the real estate game. There are several reasons why I moved to Arizona from Los Angeles, California. The reasons pertinent to this blog involve investments in the Arizona real estate market and my desire to be close to the properties I own (it's much easier to manage your rental properties when they're in driving distance from you). Compared to the West Coast, Arizona real estate is a steal. You can find properties in AZ for as little as $55 per square foot. The median price per square foot in Los Angeles is well over $300 and in the nicer neighborhoods you are looking at $600+ per square foot. Looking over the numbers, It's easy to see why AZ is an ideal place to buy real estate.

I would not be as successful at doing my due diligence if it weren't for the Internet.The Internet is an amazing tool for research. When I started looking for properties to buy, I was able to research the location, builder, subdivision, pricing, and community amenities all from the the comfort of my Desk chair. I can't imagine how many miles were spent flying and driving to scout properties before the wide spread use of the Internet. Tools like Virtual tours on the Internet allow you to see video of the interiors of homes you're interested in without the hassle of driving to the actual home. Floor plans and property detail pages also give you greater insight into the style and layout of the home. As I did my research, Queen Creek, AZ kept popping up as an awesome place to invest in. The size of the homes coupled with the price per square foot was just unheard of. The icing on the cake was how "new" the area was to residential construction. It was truly virgin territory and the land developers were just starting to catch on.

The best locations of all to invest in are the locations that will bring you the highest and fastest return on your investments. A strategy that has worked for me is finding areas that aren't on anyone's radar. I look for places that no one is talking about YET but the potential of the area is just oozing dollar signs. Let me give you a real life example of such a strategy. I found this little subdivision in Queen Creek, AZ, on the Internet, while I was still living in Los Angeles. I almost fell out of my chair when I saw what the homes were going for. I'm talking about Golf Course homes for $75,000 - $95,000, yes that's right....$75,000 - $95,000. I called a couple of friends and basically said, "I'm jumping on a plane to AZ to pick up a couple of fantastic investment properties....anyone want to come?" Well, we took that flight, drove to the subdivision and checked it out for ourselves. The subdivision looked like a Ghost town. A Tumbleweed literally rolled right across my foot while crossing the street and my two buddies looked at me like, "what in the heck did you get us into." I laughed pretty hard and said, "Trust me, if this was a well established and sought after neighborhood, the homes wouldn't be going for $75,000. It's new, and no one knows it's here...YET!...build it and they will come, to steal a line from a movie, and trust me, they will come." Well, my two friends were not convinced and decided to pass on buying in such a remote location. I, on the other hand, did sign a contract that day. The neighborhood had over 20 newly built Spec. homes, and I had my pick of whatever I wanted. I chose a smaller single story home with a few nice upgrades like tile floors and a covered back patio. Within 6 weeks of my purchase, all of the newly built Spec homes had been purchased. 3 months after my purchase, the same sized home in the community was selling for 50% more than what I paid, and in 8 months, I had made a 100% return on my purchase. Yes, I doubled my money in 8 months. I did keep my two friends updated on how well the investment turned out. I think you can figure out how that went.