Why You Should Always Buy 'Neighborhood...

normal Could you use a little insight about how to buy your buy-and-hold properties?

Well, Chris Clothier here with you to do just that in this lesson. And my tip is this: Always buy “neighborhood normal” houses.

Now let me expand on that thought…

Have you ever received this little bit of advice in the investing world?

Never buy a 2-bedroom, 1-bath house.

Is this always true? Will this directive always make sense? Should you blindly follow this advice?

Let’s take a closer look…

Follow Advice? Or Not?

Let’s say that the property you’re considering is indeed a 2-bedroom, 1-bath house. You’d like to add the property to your rental portfolio because the price point compared to the potential rent just makes sense to you.

Then you remember that advice…

But this particular house happens to be in the vicinity of a large university. You make a study of the surrounding neighborhoods, and surprise! Nearly every house is a 2-bedroom, 1-bath house.

Should you ignore that old advice and buy anyway?

Well, sure. Why?

Because that house is normal for that neighborhood.

Now if it had been located in a neighborhood that is predominately filled with 3-bedroom, 2-bath houses, that would paint an entirely different picture.

A better piece of advice would be this: Never buy the lowest end of the surrounding homes.

Any Hard and Fast Rules?

No rule is ever hard and fast in this business, but I think it’s safe to say this: Always buy what makes sense for that particular neighborhood.

normal ones Let your business plan for building your portfolio include making sure you are buying at, or above normal, for that neighborhood.

Another example—if a home is lacking an attached 2-car garage in a neighborhood where every other home has a 2-car garage, that’s what I call buying below the neighborhood normal.

Think about the opposite – the advantage of finding the only house in the neighborhood that has an attached 2-car garage. Now you’re a step above all the other properties in that area. What a winner!

To take that a step further, it would be really great to get hold of a 4-bedroom, 2-bath home, if all surrounding homes were 3-bedroom, 2-bath.

Final Note: Word of Caution

As you’re building your business and your investment portfolio, let me give you a word of caution…

These are investments that you are making to serve not only your generation, but for the generations to come. It’s important that you make wise purchases, and always know exactly who it is that you’re doing business with.

Whether you meet your business partners face-to-face or virtually online, it’s important that you get to know them, and know the experience and expertise they bring to the table.

Beware of taking business promises on faith. You must protect your business; you’re the only one who can…

Don’t get in a hurry. Do your due diligence. Hire only the best companies, who have knowledge of the best markets. Only then will you have a strong, successful investing business.

Note: Want a step-by-step process to finding, securing, and managing out-of-state rental properties? This is only 1 of 7 super-secret keys that I cover in my brand new real estate investment success report.