Professional · Irvine, CA · Member since 2014 · 24 posts · 1 vote
Hi all!
I'm doing a bit of research of RE Investing and wanted to get some feedback.
What are the top 5 things you are looking for in your investment property? Please clarify if you top 5 is a rental or a flip. Thank you all in advance!
Investor · Chicago, IL · Member since 2013 · 2k+ posts · 1k+ votes
11y
It depends on what I want to do with the property.
1) As everyone has said here - location is important. My exit strategy will be different depending on the location:
To find out what type of areas you have (if you don't know), you have to get the appreciation rate, crime rate, and information about school districts. This specially crucial for buy-and-holds. You should get info like the following:
2) I get information like COMPS, property taxes, repairs, market rents, etc.
3) I run my numbers - how much money will I make if I rehab and flip the property? How much is my cash-on-cash return if I rehab and rent the property? Below are examples:
CASHFLOW ANALYSIS:
REHAB PROFIT ANALYSIS:
BOTTOMLINE: if I will make money on a property based on the numbers in a way that is appropriate for the area, I will buy the property.
Rental Property Investor · Cypress, CA · Member since 2014 · 229 posts · 47 votes
11y
Im looking into multi-family and commercial. My goal is cashflow and add value opportunity. For instance in a multi-family i am looking for property owned by and individual, that could benefit from new windows kitchens and bathroom upgrades. Where i can increase rents. In the socal area i also look for opportunity to do gap funding on flips.
Im looking into multi-family and commercial. My goal is cashflow and add value opportunity. For instance in a multi-family i am looking for property owned by and individual, that could benefit from new windows kitchens and bathroom upgrades. Where i can increase rents. In the socal area i also look for opportunity to do gap funding on flips.
Investor · Chicago, IL · Member since 2013 · 2k+ posts · 1k+ votes
11y
It depends on what I want to do with the property.
1) As everyone has said here - location is important. My exit strategy will be different depending on the location:
To find out what type of areas you have (if you don't know), you have to get the appreciation rate, crime rate, and information about school districts. This specially crucial for buy-and-holds. You should get info like the following:
2) I get information like COMPS, property taxes, repairs, market rents, etc.
3) I run my numbers - how much money will I make if I rehab and flip the property? How much is my cash-on-cash return if I rehab and rent the property? Below are examples:
CASHFLOW ANALYSIS:
REHAB PROFIT ANALYSIS:
BOTTOMLINE: if I will make money on a property based on the numbers in a way that is appropriate for the area, I will buy the property.
Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votes
11y
For flips this is what I look for.......
1. Location there are certain counties/cities I won't invest in because of distance, entrance prices or reputations. Even in the county I invest in I don't go to run down parts or the Northern part because of distance.
2. A spread of at least $125k for ARVs between $200k-350k and less than $50-55k in rehabs. It's not the 70% rule but it's my quick take on it and pretty much ends up being close to the same thing. At various ARVs I want a bit bigger spread but I have realtor commission which is icing on the cake if the spread is tighter. I used to give up my commission to secure deals but never again as it comes in handy on the buy and sell side. Anything more than $60k rehab I don't want to get into and anything outside the $200-350 ARV I don't want to be in.
3. I hit on it on #2 but no rehab that's more than $60k. If it's an outstanding deal that takes $70-80k and there's a $200k spread or something I do it but typically I want to do the 5-6 week rehabs that are standard and get in and out.
4. Houses that are in subdivisions or cities. The properties around me that are a bit more rural sit and aren't as desirable.
5. Anything with major foundation issues and fire issues I stay away from. Wells and septic tanks are deal breakers for me normally just because of the area I'm in they aren't desirable (goes back to the rural thing). Also mostly houses built after 1950. Not really into the old houses. The ones I've done have had the most issues as far as budget is concerned.
Investor · Birmingham, AL · Member since 2014 · 37 posts · 30 votes
11y
All the advice here has been great. One thing I would add and ask myself, can I sell this property if needed for my entry price. If the answer is no (i.e, C-D properties), then I need to be comfortable holding for 10-20 years. If the answer is yes, then you can think shorter term. I am a buy and hold, but always think about "what if I needed to sell?".