Top priorities when properties shopping

11 Replies

Hey BP members,

What are the top priorities that you would consider when purchase investment properties? It might also depends on if its rental property or flipper property too. But would think they are similar to each other. 

The following list is a reference:

Safety of neighborhood 

Price/CAP rate

Location

Originally posted by @Joe Villeneuve :

Neither

Not

None of the above

 Amazing input Joe, thanks!

As a new investor I plan to follow this thread to get a sense of what some of the more experienced people place as priorities. Thanks OP!

What are the domains you thinking about?

I heard lots of bad stories about neighborhood with high crime lead to investment issues. 

Originally posted by @Anthony Bertolino :
Originally posted by @Joe Villeneuve:

Neither

Not

None of the above

 Amazing input Joe, thanks!

As a new investor I plan to follow this thread to get a sense of what some of the more experienced people place as priorities. Thanks OP!

 Your welcome.  Most people interested in learning would ask "why".

Top three priorities, for both flips and holds, in no particular order:

Flips

*  Profit

*  Big Profit

*  Bigger Profit

Holds

*  Positive Cash Flow

* high positive Cah Flow

*  Higher Positive Cash Flow

Your list makes totally sense to flips. Not sure what the list wold be for rental properties. 

Originally posted by @Joe Villeneuve :
Originally posted by @Anthony Bertolino:
Originally posted by @Joe Villeneuve:

Neither

Not

None of the above

 Amazing input Joe, thanks!

As a new investor I plan to follow this thread to get a sense of what some of the more experienced people place as priorities. Thanks OP!

 Your welcome.  Most people interested in learning would ask "why".

Top three priorities, for both flips and holds, in no particular order:

Flips

*  Profit

*  Big Profit

*  Bigger Profit

Holds

*  Positive Cash Flow

* high positive Cah Flow

*  Higher Positive Cash Flow

 So for holds you would buy in an area with high crime, minimal industry / job diversification, low income...etc., as long as the cash flow was incredibly high?

I am just starting to learn but it seems like many investors take a macro view of the property and area they are investing in, cash flow is only one part of the deal (albeit it's usually intertwined with the macro view).

Location,location,location still holds true. Do people want to live there?.

For a flip, the key is purchase price which will determine your profit if you know your numbers

For a rent/hold, the key is financing because it will determine your cash flow. I will give on price if I can get better terms.

I only do Buy and Hold.  Things I look for are...

Safe neighborhood

Not usually built longer ago than the late '60's and I prefer 70's or 80's

3+ bedrooms/2+bathrooms (though that's not a total deal breaker, but I don't LOOK for things less than that)

Good cash flow (and cash on cash ROI, now that I've learned about that lol)

And probably some other things I can't think of.  lol  But if I wouldn't want to live there, I don't expect my renters to want to either.

@Anthony Bertolino ,

My first reaction to this question was that it's unique to the individual, and their needs/wants as well as their ability , both rehab wise, but also financially.. 

Then I got to thinking more.. with aggressive  investors, it's really all about the $$$...    The location/crime/job growth/etc all has to make sense,.. and IMO you should buy where you feel comfortable...  we only buy in places that are C+-, so I wouldn't say the lowest crime, I'd say one you are comfortable with and you feel is a good match for your business.      You need to know the area,  do your homework with the employers, income, etc     Also, the high crime areas tend to be very cheap rent wise, which means less cash flow.. which means-- no thanks!      

Originally posted by @Anthony Bertolino :
Originally posted by @Joe Villeneuve:
Originally posted by @Anthony Bertolino:
Originally posted by @Joe Villeneuve:

Neither

Not

None of the above

 Amazing input Joe, thanks!

As a new investor I plan to follow this thread to get a sense of what some of the more experienced people place as priorities. Thanks OP!

 Your welcome.  Most people interested in learning would ask "why".

Top three priorities, for both flips and holds, in no particular order:

Flips

*  Profit

*  Big Profit

*  Bigger Profit

Holds

*  Positive Cash Flow

* high positive Cah Flow

*  Higher Positive Cash Flow

 So for holds you would buy in an area with high crime, minimal industry / job diversification, low income...etc., as long as the cash flow was incredibly high?

I am just starting to learn but it seems like many investors take a macro view of the property and area they are investing in, cash flow is only one part of the deal (albeit it's usually intertwined with the macro view).

 No.

Now this will either be simple...or complex in the way it is understood.  Here goes.

The cash flow, positive cash flow, already tells me what the person living in the4 house thinks about the crime, jobs, industry, etc...  If the rents are low, and the taxes are high, then the cash flow is low and I won't buy it.  Why would the rents be low, and the taxes high?  Look at your list of priorities.

Now comes the easy/hard to grasp part.  The cash flow is telling me how the most important person feels about these things.  If they accept the crime Ihigh, low, in between) the rents are higher.  If the industry is present, and impacting the taxes to make them lower, then the cash flow will be higher.

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