When CNNMoney.com posts an article about the King of Real Estate cashing out of his US holdings it's hard not to pay attention. Real Estate investing used to be easier in the US that's for sure. It used to be a new investor with some guts, education and motivation could make a killing in real estate investing. But things have changed rapidly over the last two years. The biggest change in the arena of investing has got to be the amount of investors out there chasing the deals. As Tom Barrack says in his CNN article "there's too much money chasing too few deals, with too much debt and too few brains". The internet has changed things in a big way also. With those two big changes an investor has to have a bigger better tool box to succeed in this era of incresed competition. Over the course of the next two weeks I'll be sharing some of the tools I use to find the deals. So come along for the ride and see if you can grab some new tools for the investor toolbox.



The three biggest factors responsible for changing real estate investing are:

1. The internet

2. The stock market fallout from 2002

3. California investors with lots of equity/money

One of the ways I invest in real estate is to look to markets all over the US. I use the website ofheo.gov as one of the tools for my research. OFHEO stands for Office of Federal Housing Enterprise Oversight. When you go to their website click on House Price Index, then click on House Price Index for the 3rd Quarter,{or whatever the most recent quarter is} and then scroll down to page 15 and 16 for appreciation by state. There you will see how each state compares in appreciation. Go to page 26 for the top MSA's, {Metropolitan Statistical Areas} to see which has the highest appreciation. Some investors target the top appreciation MSA's for investing. This can work well as long as you get in before things start leveling off. Just ask an investor who got in too late in Las Vegas for the huge run up in appreciation in 2003/2004. I know of several investors who are dontwanters there because they got in too late. That's not to say there aren't any good deals left in Vegas, it's just that before 2004 it was pretty much a slam dunk if you bought there.

The other way to use the ofheo website is to go to page 27 for the bottom appreciating MSA's. Some investors watch these types of markets very closely for signs of a turn around. These are markets that offer huge upside potential. Investors who got into the Denver market in 1995 reaped huge gains from this strategy. I suggest looking at both ways and decide which way you feel more comfortable using in yur real estate investing strategy and read other parts from the website to find other information that is useful.

Next time we will look at another internet tool for real estate research in markets outside of your geographical area.