There are so many different ways to be a real estate investor. When I started in the business over 22 years ago I didn’t have much money so I looked to buy properties that were in areas that I now call the “fringe”. Little did I know way back then that these areas were going to be trendy as the urban renewal focus began?
In my book I cover how to identify the fringe in great detail as I feel these areas have upwards of a 50% increase or more in value as the property improves and are carefully rented. I carved out 2 areas in Rochester, New York where I invested in these gems. Even in this turbulent real estate market you can still identify “fringe” markets and create a wealth portfolio for yourself. Actually this is the time to take advantage of the “abundant” supply of inventory. This said don’t just buy a property because it is cheap. Just because it is cheap does not mean it is in the fringe or is a great deal.
Two years ago I chose to explore another area of Upstate, New York. I was drawn to a quaint small Finger Lake town called Geneva which stands for women – go figure! While I was scoping the area out it was easy to spot the “hot” area. This is where you will find good properties that are usually over priced and have a low net income each month. There are advantages to owning these properties as well as they are easy to rent, easy to maintain and have predictable marginal appreciation. I started driving around looking for the area that would be just close enough and just far enough away to be the fringe. What I look for is great properties that have “good living” rental units. These units are spacious, warm, charming, some have fireplaces, back porches, off street parking, lit sidewalks, park close by, coffee shops, café and potential. Within a week or two I identified two specific areas that fit. It took some convincing of the real estate agents and locals of my insight about these neighborhoods as their tarnished views is what I am use to with the locals. Many people lack vision and lose sight of what is possible. Fringe areas take a while to turn into the “hot” markets but when they do your surely will feel it in your heart and pocket book!
Within a year 4 “upscale” investors have bought 2-3 properties a piece and I am doing the first condo-conversion ever in the same area. The charm loaded ghost town of a city is transforming rapidly as investors scoop up these fabulous finds and bring life back into their worn down facades. We have four new businesses that have opened as well that are doing great bringing the afflutent college population back into the city.
The other result that you won’t see at the bottom line but will feel it in your soul is how gratifying it is to be part of the improvement of a city, community and neighborhood.
It’s all about the fringe.