The Deed: Chicago

Real-estate mogul: Don't commit to a neighborhood before you check these 3 things

Whether you are buying a property to flip or a home to live in for decades, the location is as important as the home itself.

If you aren't already familiar with a neighborhood, there are three simple ways you can quickly get up to speed on a new area, according to Sean Conlon, a self-made millionaire and real-estate mogul and the star of CNBC's "The Deed: Chicago." And you shouldn't commit to buying in that neighborhood until you've assessed it in these three ways.

1. Pound the pavement

"The best way to get information: Walk the streets. There is no better way to get a handle on a place than by talking to the people who live there," says Conlon.

Photo by Drew Angerer

In the second episode of the show, business partners Mark Ainley and Bryan Sonn buy a two-story home in the Calumet Heights neighborhood at auction for $23,600. They do a gut renovation and plan to put the house back on the market for $215,000.

They need Conlon's help, but before Conlon will invest, he does his own due diligence.

On his walk through Calumet Heights, Conlon talks to a couple of ladies who have lived in the neighborhood for 41 years. "We always say it's kind of like a quiet secret," one lady tells Conlon. That's a good sign.

2. Figure out who's renting and who's buying

When you are looking to make an investment in a neighborhood, get a sense of what percentage of the homes in the neighborhood are owner-occupied.

"More home ownership, less renting, makes for a stable neighborhood and better real estate values," Conlon says.

Sean Conlon
Photo by Brandon Ancil, CNBC
Sean Conlon

3. Stop to smell the flowers

Observe the way the outdoor areas are maintained, says Conlon. As he walks through Calumet Heights, the real estate mogul likes what he sees: "It's a nice neighborhood and you can see the pride in the way the houses and lawns are kept up."

Conlon's due diligence pays off. After the renovation, before the house even goes on the market, Sonn and Ainley have an offer for $225,000, $10,000 more than they expected.

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