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Step #3 - Collect Municipal And Online Information
In this lesson, you will learn:
- Knowledge is power.
- Newspaper and town records are your textbooks.
- Local government departments provide lots of information.
- Read your local newspapers for real estate information.
- The Internet has a wealth of information.
Remember this important fact from Lesson One: in a very short period of time, if you commit to a coordinated and sustained research program, you are going to know much more about your specific investment area than most real estate agents. Now, consider that most buyers and sellers will invest hundreds of thousands of dollars on the flimsy advice of these agents. This will not be you. When the time comes, you will negotiate from a base of strength, based upon your research and not wishful thinking.
You will be strong.
Your competition will be weaker.
Therefore, you will win more often than you will lose.
When you win, you will stand to earn tens of thousands of dollars.
When you lose, you walk away losing nothing but your time.
You will take your ball and start a new game.
Is this a good game with good rules or what!
There is a wealth of free public information about your investment area at your local government office and on the Internet. Be prepared for success by gathering and studying all the government material related to your area. Listed below are examples of some of the information you should be able to obtain and some of the issues that may affect your decisions.
In Many Areas, Public Records Are Available Online
Mayor's Office
Is the mayor or town manager pro-growth? Is affordable housing a local issue? What are the real estate issues in your local investment area and what positions has the Mayor taken? Ask in the office. Ask around town. Check your local newspapers. Are there any major road or construction projects planned that would have spillover benefits to abutters? How can you profit?
Town Clerk
Ask for the Annual Town Report. The Annual Town Report is usually published in book form and sent to every taxpayer in the town. The Annual Town Report lists the revenues and disbursements for each department in the town. Where and how is the money being spent? Where are the improvements being made? Are there trends to improvements being made in specific parts of the city or town?
Building Department
What are the rules and regulations regarding building and improvements in your area? Can you obtain a copy of the building codes or find out where a reference copy is available? What are the hours the building department is open? Will they answer questions over the telephone? Do they answer email? Will the building department recommend or discourage you from using certain contractors? Are there any local, state or federal grant programs to encourage construction, renovation or restoration of certain types of property?
The Health Department
What are the sanitary codes for your area? Are there specific regulations regarding apartments or commercial property? How is trash pick-up handled? Are there guidelines, regulations or laws pertaining to the number of inhabitants per dwelling unit? Are there rules for pets? Are lead paint laws enforced? Are any lead paint or asbestos abatement programs available? Is leaf or trash burning permitted? Are there any requirements regarding architectural barriers? Are handicapped bathrooms required in commercial establishments?
The Police and Fire Departments
How are crime statistics handled for different areas? How is this information disseminated to the general public? Can you do background checks on prospective tenants? Will the police handle noise complaints, tenant disputes, the towing of unregistered cars? Who is the contact person to report suspicious activity? Will police officers also act as constables and deliver legal papers?
Does the fire department perform regular inspections of fire alarm, sprinkler and smoke detector systems? Can homes or apartment buildings be wired directly to the fire station? Is there an annual charge? What are the regulations for smoke detectors in homes, apartments and commercial buildings? Who is the contact person at the fire department for code enforcement? Can you hire police officers and firefighters for private duty work?
Zoning Board
The Zoning Board determines what types of properties can exist in certain areas. There will be a zoning map for your area. Can you have a copy of the map or can you draw your own? Is there a booklet available describing the zoning code?
Using The Zoning Map For A Treasure Hunt
Analyze the zoning map for your investing area. On the zoning map, you'll find every single-family house, duplex, apartment building, shopping center, office building, and industrial building in your investing area. You'll see every open field, forest, park, road, street, highway, river, and lake. The zoning map lays out your entire investment area - from an aerial perspective! To make your "aerial survey" even easier, most zoning maps are shaded to represent different allowable usages: residential, professional, commercial, and industrial.
The zoning map gives you a creative tool to actively research and identify new investment opportunities. The following is a list of a few profitable possibilities your zoning map investigation may uncover.
The Zoning Treasure Map
Sites for single-family residential construction or expansion
Sites for multi-family construction or expansion
Sites for condominium development
Sites for commercial construction or expansion
Sites for office/professional construction or expansion
Sites for rehab/improvement in historic areas
Sites for industrial construction or expansion
Sites for cluster development
Sites for recreational development
Sites amenable to subdivision
Sites with conversion potential due to non-conforming use
Sites abutting a zone line with rezoning potential
Sites owned by the municipality, which can be purchased
Sites in the path of anticipated development
Your investing area is changing. It has always and will always be changing. Active investors with imagination will look at a site or building as is and envision a higher and better use. Does your investing area look now as it will look in five, ten, or twenty years? The zoning map can lead you to investment treasures. Why not take an aerial view and together re-explore your investing territory?
Board of Appeals
The Board of Appeals grants variances to the zoning
code. How easy or difficult is it to obtain a variance in your area?
What are the procedures for applying for a variance? Pose a hypothetical
question to off-duty board members. If I own a two-family house and want
to convert it to a three-family house, what are my chances for success?
How often have these type of variances been granted in the past? Don't
be afraid to ask questions, because it's this kind of information you're
going to need to become an effective decision maker. Then, when a seller
or realtor represents a conversion possibility or splitting off an extra
lot as no problem at all, you'll have an idea whether they're talking
fact or fancy. Be prepared. Study your zoning map and know the past
history of your Board of Appeals. Know the names of the attorneys who
most frequently succeed with appeals. If this board is elected,
determine if it is in your interest to financially support winning
candidates.
Assessor's Office
The primary source of revenue for most municipalities
is the property tax. It is the job of the town assessor to place a value
on every taxable piece of real estate in the town. The assessed value of
a piece of property is usually much lower than the current market value.
However, you can use the assessed value as a basis for comparison with
other similar properties in the area. Are they comparable and if not,
why? You can also use the assessed value to determine the property tax
for the real estate.
Property taxes are usually stated in a dollar amount
per thousand dollars of assessed value. If the property tax is $26 and
the assessed value is $200,000, the tax would be $26 X 200 or $5,200 per
year. With knowledge of how the property tax is calculated, you can look
at a real estate listing sheet and if the tax figure is old, the rest of
the expense figures are probably also outdated.
Is there an assessment book printed? Can you obtain a
copy of the assessment book? How is assessment information filed? Is the
information available online? Will the Assessor's Office give
information over the telephone? When was the area last assessed? Are
there plans for a revaluation?
Housing Authority
The Housing Authority will handle any state or federal rent subsidy programs for your area. What are the eligibility requirements for these programs? What type of applicant screening does the Housing Authority do? Is the Housing Authority currently short of units? What is the rent range paid for various size units in your area? What are the names of the people responsible for tenant placement? Are there special programs for the elderly or the handicapped?
Planning Board
The Planning Board makes decisions regarding the future and growth of the area. What are their plans for specific areas? How is Planning Board information disseminated to the public? How does the Planning Board view the housing situation in your area? Is the area population increasing or decreasing? Is industrial and commercial growth promoted? Is the sentiment of the Board to increase or decrease certain types of property?
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Master's Tip: Do you want to hear all the
gossip and rumors and wild speculation? Yes. Do you want to rub
shoulders with the millionaires who already own a lot of the income
producing property in your area? Yes. Do you want a quiet place to push
your next proposal with appropriate politicians and town officials? Yes.
Do you want to buy a beer for the head of the sanitation department or
the town surveyor? Yes. Being a social person, an extrovert, can pay
dividends. Join the Rotary Club or the Chamber of Commerce or the
Country Club. Go to the bars and social clubs and coffee shops where the
power elite meet. Remember, you learn when you are listening and not
when you are talking.
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