Last week we started a series on how to get the most out of FinestExpert.com:
- Thursday: Getting Started with FinestExpert.com (two most commonly used components of the financial criteria search – by discount and by cash-on-cash return).
- Monday: Financial Search Criteria for Real Estate Investors (our users report that the financial search saves over an hour per property being considering).
Today we are going to consider the common property criteria options. From the main search, the property type list is immediately available letting you select only the specific property types of interest – e.g., look only for single family homes and ignore all condos.
When you want to control additional property criteria in your search, click the “+ More” button which expands the available criteria to look like this:
The checks and values shown are the ones I typically use as a starting point.
In the current environment, a single family home (i.e., detached) is more desirable for both renters and owners. These properties move the fastest; and, when prices are as depressed as they are today, this is usually a better buy because you get more home for the same amount and you get to avoid home owner association dues. These homes also have more potential for appreciation.
A three bedroom, two bath home is the most popular type of home. I usually allow my search to increase to a four bedroom, three bath, but seldom larger as they become more difficult to find good comps and the larger size typically reduces the future buyer pool. Only when I cannot find a 3br / 2ba in the right price range will I consider a 3br / 1ba (unless I happen to have a client looking to do serious rehab willing to add a bathroom).
The modern homeowner (and renter for that matter) expects a larger home than 20+ years ago. I typically set my minimum to 1,150 sqft. Only when I need to look in a specific area of smaller homes will I reduce or eliminate this criteria. When I see a 3-bedroom home that lists above 1,600 sqft (in my area), I am immediately suspect of room-additions which are, as often as not, not beneficial. The ones that seem to make a positive difference, when the construction is good, are the extension of the primary living area and usually include a kitchen remodel. Bedroom additions are theoretically good, but I’ve seen too many additions where these are little more than a thoroughfare to another part of the home.
“Newer is better,” is a common mantra for both investors and new homeowners as it typically implies less deferred maintenance. Out west, a 30-year old home is a good baseline. Again, in certain areas (or price ranges), this has to be eliminated.
The checkboxes provide the ability to search for either active “for rent” or “for sale” properties. Under the “for sale” category, there are four stages of foreclosure of which I check only the first and last options.
- No foreclosure – this will either be a short sale or a traditional sale.
- Pre-foreclosure – these properties have received a Notice of Default. The asking price shown for these properties is typically the default amount (as compared to a true asking price). As I am usually most concerned with properties available today, I do not find these types of property useful. However, sometimes it is valuable to track the quantity pre-foreclosures as a potential indicator of values or to track specific properties of interest.
- Foreclosure – these properties are to be sold at auction or at a trustee’s sale. Again, the asking price shown for these properties is typically the default amount. These can represent great potential deals, but are subject to serious bidding escalation when there is substantial equity in the property. Such sales typically require cash buyers. There are people who will team with you and provide the cash if you don’t have it – but you need to be sure about the property and know your risk.
- Real Estate Owned (REO) – Bank Owned Property – Bank Owned Foreclosure – Lender Owned Property – Other Real Estate Owned (OREO) are a few of the common references. In any case, these are properties that have already gone through the foreclosure process and are now owned by the lender (e.g., bank).
I usually only check #1 and #4 because these are listed with what I call, true asking prices – the property can be bought for the amount shown (plus or minus a little). Sometimes the REOs are even a better choice than the short sales found under “no foreclosure” because the lender has already “accepted the loss” on an REO and can readily move through the sale process, but this is not the case for the short sale where the homeowner, lender(s), and mortgage insurance companies are all pointing fingers at each other to determine who will have to eat the loss.
Hopefully you can begin to really see the power available to you when you combine these property criteria with the financial criteria.
Finally, after you have selected your property criteria, click on the “- Close” button and then press “Search”. This will then take you to a map (or list) of potential properties satisfying your search criteria.
Before you go, can you do two small favors for me?
- Would you tell me what you think?
- Can you tweet this, tell others, and ask them what they think to?
