NEWS: The Golden Vision

Everyone knows that there is great money to be made in real estate. The question is, who is making it. For so many, real estate is an investment avenue that other people take. They don't get into real estate because it seems so large, ominous, and risky. They also know that lots of people make money at it, but don't have a specific idea of how.

Flippers - Most people when they think of investors, they think of Fix-and-Flippers. People who buy a distressed or under market value home, fix it up, and sell it for a profit.

Home Holders - People who purchase homes or condos, rent them out to help cover the mortgage, and then eventually sell it or refinance it to capture some of their gains.

Apartment Owners - People who purchase multi-family homes and apartment units to rent out.

Land Holders - Investors who purchase land to hold onto while it goes up in value.

Land Flippers - These investors are more rare than the other kinds of investors. It takes great information and some risk in order to be able to purchase land and immediately sell it for more money.

There are many other ways to make money in real estate, but these are classifications that I came up with to categorize the most common forms of investors. All of these investment areas have great potential for making money. Though many are successful, the most successful in the different areas of investment have a common thread. They can look at a property and its surrounding areas and see not only how it is now, but how it is likely to be in five and ten years down the road. I call this the Golden Vision.

Golden Vision is a skill that few have naturally, but that most can learn with some time and experience. It has more to do with your knowledge than it does with your vision. You can start by watching how things develop and change over time in your neighborhood or investment area. You will start to see trends that happen over time in growth areas and even in urban redevelopment. Understanding these trends helps make better judgments about how things are likely to go in the areas where they are investing. Keep in mind, trends and changes take years to follow and learn from. There is good news though, you can likely look back at how you have seen things change in your own neighborhoods that you are familiar with and use what has happened and use that for your analysis. See if you can find out what prices used to be in that area vs what they are now. Follow it year to year as you do your analysis. Look at the property pictures and the conditions of the homes. This is a great way to get a jump start using what you already know. You just need to then sit down and see how prices of properties in that area have changed to make that information more useful.

In essence, Golden Vision is a combination of an understanding of city planning and zoning procedures, and understanding of economics and highest and best use of land, and an understanding of demographic trends. A keen understanding of these three areas will help turn your vision golden and increase your returns as you invest. Developing this knowledge with sharpen your vision and increase your wealth.

Jared Murphy
Associate Broker - Allstar Realty