How to pick the perfect location to buy a home, according to a real estate mogul
Location is more than just an address when it comes to making a smart real estate investment.
That's according to Sidney Torres, a serial entrepreneur, real estate developer and host of CNBC's "The Deed."
When Torres bought his first flip, he was making $20,000 to $22,000 a year in base pay — $40,000 with overtime. When he was only 20, his grandmother co-signed his first loan. Since then, he has developed over $100 million in real estate.
To make money in real estate, Torres advises buying homes that are in up-and-coming neighborhoods, in the "sweet spot" between the hot spot and the fringe.
But it's important to pick a location not just by triangulating on a map. You need to visit the neighborhood you are considering in the morning, the middle of the day and at night, says Torres.
"To really learn about a market, to really learn about an area, I think you drive around the area," he says. "You walk the area. And I am not talking just once. I am talking in the morning, when the sun is rising, when the sun is setting, in the evening. I think it's important to go during the day."
"Grab a little lunch and sit in your car and hang out in the area," he adds.
You want to be near good schools, shopping centers and close to main transportation sites, says Torres. Also, you want to be sure the neighborhood infrastructure is sound. For example, you want to know that streets drain well when it rains hard and that the city picks up the trash.
"A big mistake is not to spend the time there. Just to go there during the day, when you are at work — I think that's the wrong thing to do," says Torres. "It's really not good if you do that because you end up buying something and end up finding out that at night it's a totally different environment in the neighborhood."
In your analysis, there is no one single feature of a neighborhood that is more important than any other.
"You have got to evaluate the entire area," says Torres. "You have to look at all of it."
Watch Sidney Torres in CNBC's "The Deed," premiering Wednesdays at 10 p.m. Eastern.
See also:
This self-made millionaire bought his first flip while making only $40,000 a year
Real estate mogul says this purchasing secret helps him find perfect buys