How do you when you have a good area

[Nanette]

The area I'm looking to have my market in (L.A. area) has around 10 -15 REO's available on Redfin and foreclosureradar.com ranging from $465K to $826K, would this really be a good area to have my market in? The houses that have sold range from $375K to $1.1 million.

Thank you.

[Tony Alvarez]

Choosing a specific target market takes careful analysis of many different variables such as:

1. Decide what you want to do - what is your business model?
For example: do you want to buy and sell, buy, fix and hold, lease options, buy properties subject too - the world of real estate investing choices is HUGE!

2. Know your Target Market - you have to understand the elements of your Target Market including, price bands (prices properties are selling for), supply and demand, available financing and strength of your rental market before jumping in and starting to buy.

3. Other important variables include your level of understanding of construction costs and repairs, the availability of responsible dependable contractors/handy men, as well as the level of quality of construction the buyers in your Target Market expect to see.

4. Available financing and your own personal credit and cash situation.

You need to understand what IS possible to do, profitably, in your Target Market and this is going to take YOUR time doing research on what's presently taking place within the area you choose to invest in.

Remember that what properties are selling for is not necessarily the important issue. It's what YOU'RE paying for them. Even though prices in your market may be $300K to over $1M, if you're only paying 50% of what a property is worth, assuming a reasonable percentage of repair, holding and selling costs, you should be able to do just fine.

Understanding your Target Market thoroughly is crucial to keeping yourself out of trouble and making good decisions that will benefit you financially in the long run.

All the above is information that YOU need to know before you jump in and start buying properties. Asking ME what I think of MY specific Target Market is a great idea. However, asking me about YOUR Target Market is not necessarily the wisest thing to do.