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Real Estate Finance and Investment Manual > Chapter 24 HOW TO EFFECTIVELY DEVELOP AND IMPLEMENT YOUR COMFORT ZONE > Flashcards

Chapter 24 HOW TO EFFECTIVELY DEVELOP AND IMPLEMENT YOUR COMFORT ZONE Flashcards

1
Q

What are the two critical elements that ensure success as a real estate investor?

A
  1. Your goals
  2. Your comfort zone
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2
Q

What is the first step in building your comfort zone?

A

Review your investment goals

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3
Q

How many principal steps are there to build your comfort zone?

A

Eleven

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4
Q

What should you understand in addition to your investment goals?

A

The comfort zone strategies and goals

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5
Q

Fill in the blank: The area where your zone begins is _______.

A

[the selected area]

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6
Q

What is important to obtain to work your comfort zone?

A

Additional material

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7
Q

What is the sixth step in building your comfort zone?

A

Begin to build your investment team

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8
Q

What should you identify regarding local insiders?

A

Where you will meet the local insiders

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9
Q

What is the tenth step in the comfort zone building process?

A

Slowly add to your comfort zone

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10
Q

What can high vacancy factors in the rental market indicate?

A

Working class people leaving the area

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11
Q

What is one essential modern tool for real estate investors?

A

A digital camera

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12
Q

True or False: Knowing more than the property owner gives you a negotiation edge.

A

True

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13
Q

What should you do when assessing the market?

A

Make an overall assessment of the market

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14
Q

What should you familiarize yourself with in your comfort zone?

A

Current and future infrastructure and services

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15
Q

What is one of the most important aspects to assess in a community?

A

Employment opportunities

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16
Q

What should you avoid when applying statistics from other areas?

A

Avoid applying statistics of those different areas to your own backyard

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17
Q

What is the importance of knowing the demographics of an area?

A

To understand where different populations live and their earning power

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18
Q

Fill in the blank: Your comfort zone should be confined to _______.

A

[one governmental jurisdiction]

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19
Q

What is the role of local realtors in your investment team?

A

Provide access to statistical information

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20
Q

What should you seek out from local governmental departments?

A

Demographic information

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21
Q

What is a key benefit of having access to local aerial maps?

A

Understanding the lay of the land

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22
Q

What is the ultimate goal of reviewing your investment goals?

A

To stay focused on attaining your goals

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23
Q

What can be a precursor to events in the rental market?

A

High vacancy factors

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24
Q

What should you be aware of regarding local politics?

A

It can impact property use and investment opportunities

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25
What does R-4 zoning allow in different cities?
R-4 zoning may allow different numbers of residential units per acre in different cities ## Footnote For example, one city may allow 40 units per acre while another only allows four units.
26
Why is communication important in real estate investment?
Communication is crucial for obtaining information and reaching important personnel in city hall and county courthouses ## Footnote This includes knowing how to access contact lists and web pages.
27
What is the first source of useful real estate investment information?
The tax assessor's office ## Footnote It provides information such as property owners’ names, transaction dates, and tax appraisal values.
28
What should you pay attention to when scouting an area for investment?
The existing zoning and potential for higher economic value uses ## Footnote Look for discrepancies between current use and zoning allowances.
29
What does 'grandfathered' mean in zoning?
'Grandfathered' refers to existing uses that do not conform to current zoning but are allowed to continue ## Footnote They can remain until certain conditions trigger a need to conform.
30
What can trigger a property owner to conform to current zoning laws?
Alterations to a major part of the structure, such as remodeling or damage from a fire or flood ## Footnote Major changes can lead to the requirement to comply with current zoning.
31
What are zoning ordinances?
Rules that dictate land use and building regulations in a city ## Footnote They can be found in printed form or online.
32
What is the importance of off-street parking codes?
They can limit the total volume of saleable or rentable space on a property ## Footnote Understanding these codes helps in determining usable space.
33
What happens if both city and county building codes apply to a property?
The stricter code will prevail ## Footnote This is important during the platting process before obtaining a building permit.
34
What is the purpose of the Department of Transportation (DOT) master plan?
To inform about future roadway developments and associated impact fees ## Footnote These fees support infrastructure for new developments.
35
What types of meetings should you attend for real estate investment insights?
City and county commission meetings, DRC meetings, planning and zoning meetings, board of adjustment meetings, and homeowners’ association meetings ## Footnote These meetings provide valuable information on local laws and developments.
36
What is the Development Review Committee (DRC)?
A part of the building and zoning department that reviews initial building plans for potential issues ## Footnote Engaging with the DRC can provide early insights into development challenges.
37
What is the significance of color coding city maps?
To visually differentiate zoning uses and understand land use planning ## Footnote This helps in identifying potential investment opportunities.
38
What role does state law play in real estate investments?
State laws may affect property use, licensing, and zoning regulations ## Footnote Compliance with these laws is crucial for successful investments.
39
What is the purpose of impact fees?
To fund infrastructure needs caused by new development ## Footnote They can significantly affect the viability of a project.
40
What is the process of platting?
A bureaucratic process to certify land for a specific zoning use ## Footnote It can be lengthy and requires approval from various governing agencies.
41
What should you do before obtaining new materials for zoning work?
Make sure to gather all previously mentioned items and familiarize yourself with them ## Footnote Understanding local government resources is key.
42
What can be a downside of attending homeowners' association meetings?
They can involve insider conflicts and be less relevant to broader investment strategies ## Footnote However, they may provide insights into local development controversies.
43
What is the purpose of using translucent highlighter pens on a city map?
To read the names of streets and see lot lines clearly behind the color.
44
What does the zoning code pyramid represent?
It shows that permitted use is usually more restrictive as you move from highest to lowest use within a category.
45
What are the classifications of commercial zoning from most restrictive to least restrictive?
* C - 1 * C - 2 * C - 3 * B - 1 * B - 2 * B - 3 * I - 1 * I - 2
46
What type of properties may be included in I - 2 Heavy Industrial zoning?
* Junkyards * Heavy manufacturing * Paint and body shops * Outside storage * Everything allowed in I - 1
47
What is meant by 'upgradable' properties?
Properties that can produce a greater economic benefit than their current use.
48
Why is it important to visit neighborhoods before investing in real estate?
To perform due diligence and assess the value of the property effectively.
49
What should you photograph when assessing prospective properties?
* Houses * Buildings * Vacant lots * For Sale or For Rent signs
50
What is one benefit of visiting open houses?
To learn about property values which can reflect on the value of other properties in the area.
51
What type of properties should you inquire about besides For Sale properties?
Properties with For Rent or Vacancy signs.
52
What data can be obtained from the tax roll?
* Owner's name and address * Price they paid for the property * Date of acquisition * Other interesting data
53
Why is the date of acquisition important when making an offer?
It helps to understand the owner's motivation and whether they are selling for a profit.
54
What is the significance of knowing the price paid for a property?
It allows you to chart out property values and assess trends in the neighborhood.
55
What should you keep as a record of your findings?
A journal of your data.
56
Who should be included in your investment team?
* A partner or confidant * A realtor * A lawyer * A CPA * Government insiders
57
What should you look for in a realtor?
Someone you can relate to and trust.
58
What qualities should a lawyer on your investment team possess?
Experience in real estate and a good understanding of the field.
59
How can you develop rapport with government insiders?
By being charming, logical, and following up.
60
What departments should you engage with to build relationships within local government?
* City and county hall * Building department * Planning and zoning * Department of transportation
61
What is a good strategy for following up after meeting someone in government?
Send a short, handwritten note expressing gratitude and your interest in discussing a property.
62
What is the definition of a real estate insider?
A person who has dedicated substantial time to learning about real estate investing and knows the essential rules and good players in the field.
63
What is one key trait of a real estate insider?
They learn from the mistakes of others and recognize their own mistakes without blaming others.
64
True or False: Real estate insiders believe that failure is detrimental to success.
False
65
List three places where real estate insiders can be found.
* City hall and county courthouse * Building and zoning departments * Local newspapers and legal publications
66
What should you do if you have negative answers to the insider information potential questions?
Review why and spend time building your confidence.
67
Fill in the blank: Make reasonable offers ______ below recent sales.
10 to 15 percent
68
What is an important provision to include in property offers?
Allow 45 days minimum for due diligence.
69
What should you do if a deal does not work out to your benefit?
Walk away and avoid burning bridges.
70
What is one strategy for expanding your comfort zone?
Expand your zone within the same governmental area.
71
What is the clich é mentioned regarding learning?
The more you learn, the more you realize you don’t know.
72
List the first three steps to effectively implement and build your comfort zone.
* Review your investment goals * Understand the comfort zone strategies and goals * Select the area where your zone begins
73
What should you do after selecting your investment area?
Obtain additional material to work the zone.
74
What is the last step in the eleven steps to build your comfort zone?
Continue to expand your experience in the world of real estate insiders.

Real Estate Finance and Investment Manual (26 decks)

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