Ready to hit the pavement

Hi – I am one of those newbies who would like to progress my development and skill in the world of property investing. I have been reading the books and following this forum for some time, but now take note of the strong trend in discussions that suggest that the best way of moving forward is to get away from the computer and start researching by literally walking the streets. However I have one question that I would like some assistance on before moving forward – how do you find the location where you should be spending more time. I am not looking for postcodes, but I am looking for some ideas about how you start to shorten the list of possibilities. If you live in an area like metro Sydney, where price ranges are at a higher end, and you are not familiar with other areas that are considered to have potential for further review, what research can you do to narrow the search down, rather than just drive around hoping you can find the right location.

As a newbie, I believe my starting place for a strategy is to buy, renovate, & rent – hoping to turn a place into a + cashflow within 5 years through renovation improvements and rental increases + achieve above inflation growth by 3%. I am hoping this is an achievable objective and one that provides the right returns when comparing to other investment opportunities, but will not know until I get out there and actually start crunching the numbers on some real properties – would be happy to hear your thoughts on my proposed strategy. I also need to test this strategy against some of the positions provide in Steve’s latest book. My strategy may change as I understand more through walking the streets. I currently have a reasonable amount of equity to get the ball rolling. I also monitor with interest the various thoughts being put forward regarding timing of the market and when to actually start to purchase properties. Notwithstanding this, I still would like to get out there and crunch the numbers of a few properties, even if it I do not purchase my first place for some time, this way I can build up a higher level of experience and reduce the risk and be prepared to act when I believe the time is right for the location I identify.

From what I have seen I believe the following would be the starting point, but would like some confirmation/further ideas.
· Search for 3 br house on real estate.com within a specific price range that I would be willing to invest in.
· Contact real estate agents in these areas to identify expected rental returns – set some general target return ranges based on the properties identified.
· Identify locations that appear to provide houses that show average rental returns for renovated houses = rent required to achieve + cashflow for houses that appear to present opportunity for renovation after completing renovation.
· Do further research in terms of population/growth/home owners v renters/price movements for the particular locations that fall within the rental return range – set some targets for these indicators
· Visit the location – talk to real estates, people in the area, newsagents, local business, etc
· Visit councils to understand major developments, etc listed for the area

Once I obtain some feedback on the above, I guess the real question will be what targets I set for each of the indicators in order to narrow the search, and as I write this message, I am believing that this is the area that I will need to analyse and understand further in order to progress. Anyway, for those that have had experience in this, your thoughts around this would be most valuable.

Thanks
Tigers13