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How to Select and Develop Your Home Investing Farm Area

Aug 17, 2007
A farm area is an area of your city in which you choose to concentrate your investing efforts. Although it can be a time consuming process, this is a powerful way to create long-term investment opportunities for you.

While you will still be looking for properties in other areas, a portion of your investing efforts will be focused specifically on your farm area. The benefits to you of taking the time to cultivate your farm area are:

You'll be an expert on property values and market rent in this area; you'll be able to spot good deals and move quickly to close on them.

You will also know when a seller is telling you the truth about a property price and this will help you avoid costly mistakes.

You'll thoroughly understand the selling points of an area that you can share with your tenant-buyer to encourage them to move in.

Over time this is one of the most effective ways to bring deals to you. You'll save time and effort because people will know about you and how you can help them, they will come looking for you to put together deals.

Because you have carefully chosen your farm area, you can maximize your profits. You will select an area with high rates of appreciation and strong market rents, turning your options into incredible money making to

You need to think about the price range of homes in which you want to invest. Obviously since appreciation is one of the ways you make money with Purchase Option Investing, the more expensive the homes, the more money you will probably make on each deal.

What you want to do is find the neighborhood with the price range of homes you would like to invest in using Purchase Option techniques. You should focus on homes that are in the middle to upper middle portion of the spectrum of homes available in your area.

These homes offer the best profit opportunity with the least amount of work. The purchase option can be applied to any priced home you want.

Ideally you are going to pick out a neighborhood with a total of 1,500 to 2,000 homes. What? Are we really saying your farm area only needs to be this big? Yes. A farm area of this size, when properly worked over time, will provide profitable deals month after month.

Depending on the demographics of the area and how many renters there are, you are going to have a number of rental homes in that area, too. Our goal is for you to end up having between 300 and 400 homes that you know might be rentals.

Once you've picked out this farm area, one of the things you want to do is drive through it regularly so that you can get to know it. Take different routes so that you go through all of the various streets and get to know the neighborhood.

In addition, we want you to go out and take a walk or ride your bike in this area. You can see things when you are moving at a slower pace that you are not able to see as you are driving through it.

What is it you're looking for? You are looking for any clues that reveal potentially profitable deals. The best clue is a vacant house. When you see one, write down the property address and do some research to find out who owns it and how you can contact them.

Next, be aware of for rent signs. Any time you see a for rent sign in your farm area, write down the phone number and address of the property.

You are also on the lookout for any property with for sale by owner signs. Jot down the number and call the owner. One way in which you can get to know your farm area and spread your name throughout it is by handing out flyers.

If you meet someone as you are walking through the neighborhood, have a quick conversation with them about the area. Let them know that you buy real estate, and that you even pay a finders fee for leads that turn into deals.

Also make sure that you ask them about market rents and property values in the area. These people are a hidden source of valuable information many investors overlook. You are beginning your education about values in your farm area. Over time, you will become an expert on this location.

Start developing a list of people who will work for you as property bird dogs. A bird dog is someone who lets you know about a seller who might be motivated or flexible. If you are able to put a deal together with this seller, you can even pay a referral fee to the person who told you about the property.

You only pay money after you make more money. This source of motivated sellers has an unlimited upside potential and no downside. You only pay for results! The more quality people that you have referring people to you, the better.

We suggest you pay between $250 and $1,000 for each successful referral. This might seem high, but you'll be making thousands more on these deals using your powerful Purchase Option techniques, so the money is worth it.

Examples of good contacts who may want extra income and would make excellent bird dogs include:
Postal delivery people in the area. They even know when a house is a rental, when someone is about to move, or if a house is vacant.

Newspaper delivery people, house sitting companies, moving companies are all great bird dogs so be ready to work with them. Are you starting to get the idea?
About the Author
Richard Reichmann is internationally known as a millionaire maker. He,s a leading consultant in real estate and internet marketing strategies that are profit proven.

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