How do you know what to buy if you have no idea what you are looking for. Most new real estate investors never set a criteria and therefore, never buy investments. It makes no sense, since we all set criteria on just about everything else buy. When we want a new TV, we set our criteria… must be 42”, HDTV, plasma. We then go to the electronics store and look for that TV and if is there, we buy it. We do the same with small purchases, large purchases and just about everything in-between.

We even set criteria on our friends and loved-ones.

I’m going to marry a man that’s 6 feet tall, tan, blue eyes, loves to cook and clean the house, loves to watch desperate housewives, and never complains… You get the point

How come this is so hard for a rookie investor to understand?

I talk about criteria a lot, and usually just skim over it, because the best criteria are very simple. Using the example of the husband criteria above you can see that we often make things difficult, how many times have you set a list of what you look for and then get something completely different, or change your criteria, not by choice but because you forgot it.

If you make your criteria too hard to remember, when that times comes to buy an investment property, you will get locked down and scared to buy because you won’t know that this is the perfect property. Start out with 3 simple items Price, location, goal.

1. Price – I will buy an investment property that is less then $200,000 and that is 20% below market.
2. location – house must be within 100 miles of me, or house must be in San Francisco.
3. Goals – I want to have $200 cash flow per month.

That is a good place to start. You can see that pretty much covers everything you need for a basic investment. When you start getting a good understanding of criteria you can start to add items like property type, financing options, repair, neighborhood, tenants, etc… Of course you can always just write down your criteria so you don’t have to memorize it.

Setting up an automatic listing notifier is a great way to put your criteria in action. Simply set up an automated home search and make your criteria work for you, not the other way around. You’ll get notified of properties that meet you criteria and then it’s up to ou to take the next step.

The Legacy Group – Below market notification

The Legacy Group – Property Watch