5 essential tools for real estate investors
Having looked at thousands of residential and commercial properties throughout the country over the last twenty years, I wanted to share a list of 5 tools that I use daily when evaluating properties. These tools are critical since we are a hard money lender/ private lender that evaluates each property in house and we do not rely on outside appraisers for valuation. Each of these tools is necessary to properly evaluate the value of a property and make the right investment decision.
- Google Maps, earth, and street view. Before I physically look at the property I always look at the property first in google street view so see what the property looks like and just as important what is around the property. Zillow did an analysis that showed that homes near a Trader Joes or Whole Foods increased in value substantially quicker than other houses in the same city. I also use google earth (especially on a commercial property ) to see how the property lays out, ingress, egress, frontage, etc… Finally google maps is invaluable when navigating to actually view the property
- Commercial comparable program. If you have read my prior article, what do dominos and appraisers have in common, you will understand the importance of pulling your own comparables to confirm the property value. For commercial comparables, the best program I’ve used is Loopnet. You have to subscribe to the service, but it provides valuable property information including sales, lease rates, etc… that are critical to valuing a commercial property.
- Residential comparable program; there are many sites offering AVM (automated valuation methods) from Zillow to trulia to realtor.com. Each of these sites can provide misleading information (see prior article: is Zillow wrong? Which discusses the weaknesses with AVM models) The best source for comparables on the residential side is the particular county assessor office.
- Along with locating the comparables, it is important to map the comparables so you can see visually how they lay out and their proximity. I like to use Bing Maps to lay out all the comparables. This programs is almost identical to the old streets and trips program that many real estate professionals used to adore.
- All the technology in the world cannot replace the most important tool of all, your feet. It is critical to get out of your car and walk! Whenever you are looking at a property it is important to walk the property both inside and out (see prior article 3 tips to understand the value of the property ) to best understand the value. I also always walk the surrounding areas. When walking the property look for what is in and around the property and use your primary senses (smell, sight, and hearing). The physical walking of the property is the number one tool I use to properly evaluate a residential or commercial property.
By using the 5 tools above you greatly increase your odds of accurately valuing a property and making an accurate investment decision.
Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in the Colorado Real Estate Journal, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
Fairview is a hard money lender specializing in private money loans / non-bank real estate loans in Georgia, Colorado, Illinois, and Florida. They are recognized in the industry as the leader in hard money lending with no upfront fees or any other games. Learn more about Hard Money Lending through our free Hard Money Guide. To get started on a loan all they need is their simple one page application (no upfront fees or other games).