Q&A: How do I find an investment property?

Q: What is the best way to go about looking for an investment property?

Jimmy Jooma, Woodside

A. Carl Schiovone, co-founder of Cypress Investment Properties and a New York State-certified real estate coach, offers these tips for the novice investor:

Do your homework

“The first step is to get a solid education on real estate investing,” says Schiovone. “That would include taking courses, reading books, joining a real estate investment organization and aligning yourself with likeminded people who are successful in the business,” says Schiovone. Don’t invest near your home just because it’s familiar. To find the best values, thoroughly research neighborhoods that are beyond your comfort zone, he says.

Network

Visit the National Real Estate Investor Association website to search for a local chapter such as The Real Estate Investment Education Club, which holds monthly meetings at Domenico’s restaurant in Levittown. Ask fellow investors for the inside scoop about the localities where you’d like to invest. Don’t try to go it alone, cautions Schiovone. Get word-of-mouth referrals and assemble a team of professionals to advise you, such as attorneys, accountants, Realtors or property managers whose advice can protect you from costly mistakes.

Create a business plan

Decide what kind of investor you want to be. Do you plan to “flip” a house – that is, buy it on the cheap, fix it up and sell it at a profit? Are you looking for rental income? What’s your time frame? “Outline your goals, risks, barriers to entry, challenges in getting to your goals,” says Schiovone. “Then put a plan in place that is going to logically get you to where you want to be.”

Get your financing in order

Determine your start-up costs, and have a contingency plan for unexpected expenses. “If you’re going to do a rehab, how long is going to take and how much reserve capital will you need for the rehab?” says Schiovone. “They need to protect themselves from all of the risks that could come up. What if the price in the market drops, or your schedule increases? You have to take all these variables into account and work backwards to determine what you’ll pay for the property.”

Know the signs of a good investment – and a risky one

If you plan to resell the property, scout out a desirable location. Pass up homes that are atypical, such as a two-bedroom house – it will be much easier to sell a place with mass appeal. Steer clear of places lacking certificates of occupancy for extensions -- getting the place up to code could be cost-prohibitive. “A good deal would be a property where you’re coming into it with a strong equity position, you’re buying it far below market value. It has to be a desirable house,” Schiovone says. “You need an exit strategy. What will you put into it, and what will you get out of it?”

Do you need some real estate advice? Send your question to realestate@newsday.com.