seems to me like the number one rule in any kind of business is 'be prepared'. This would include doing your research, exit strategies, emergency planning etc.
How many businesses go broke every year due to unanticipated issues such as higher-than-expected costs, or lower-than-expected returns.?.
or not having cash or at least a line of credit available for emergencies down the road, like car accidents (company vehicle?).
Investor · GA · Member since 2008 · 44 posts · 8 votes
18y
I like the comments of Michael Shadow as he refers to Donald Trump-
"he buys ok locations then makes them the best location."
We are currently trying to do that very thing as we have bought several apartment buildings in an OK area and are trying to make them better by improving the property.
We have also set up a community group (a mastermind group of sorts) that is now meeting and discussing issues and trying to bring our area up by making improvements.
Our goal is to collectively bring our apartments up a notch, which we believe will increase rents, reduce turnover and overall bring a higher price in the long run.
If anyone has any additional thoughts or feedback on that process.. please post. thanks.
Park City, UT · Member since 2008 · 28 posts · 3 votes
18y
I have to come in somewhere between the 2 ends of the spectrum. Location is indeed very important, but buying at the right price is really more important
Park City, UT · Member since 2008 · 28 posts · 3 votes
18y
Roys restaurant group (fine dining high grossing businesses) always chooses locations that aren't right on the beach, but has the name, like Trump, to make a lesser location work, and therefore can get a better deal on the space, and in turn be more profitable
Residential Real Estate Agent · Long Beach, CA · Member since 2008 · 432 posts · 63 votes
18y
I'm not very familiar with all of Trump's holdings except that he bought a golf course on the ocean in Los Angeles (primo location), bought a beat up hotel on the Vegas strip (primo location), owns an apt. building on 5th Ave in NYC (primo location), a hotel at Michigan Ave on the river in Chicago, has a new resort on the ocean in Baja, etc. Seems like location has driven more than a few of his decisions.
I have a rental house in a so-so area and we bought there because it looked like the area was turning around. We tried really hard to start up a community group and it sort of worked but in 10 years, the neighborhood is basically the same as when we bought. I would not expect an area to change dramatically unless something big is already under way. I mean, you can't expect to get high rents in an area that doesn't support them. I would say buy in the best location you can afford to make the numbers still work for you.
Real Estate Investor · Rancho Cucamonga, CA · Member since 2008 · 78 posts · 2 votes
18y
The #1 rule is: do what works for you. If you can find profit in a lowly neighborhood, go for it. I guess this is sort of like the "it depends" mentality a few posts up.
Real Estate Coach · Atlanta, GA · Member since 2008 · 80 posts · 5 votes
18y
Location can play a role, but the number one rule (other than buying in a desirable area) is really in three parts:
1. Price & Terms
2. Cash flow
3. Appreciation
OK, so I cheated, but the point is if you have these key components going for you, your portfolio will grow and so will your profitability. If your property depreciates after you purchase it (in a declining market), it won't matter nearly as much to you as long as you have positive cash flow. The problem a lot of beginning investors have, though, is they don't know a good price, they can't accurately predict cash flow or how to determine whether they'll have POSITIVE cash flow, and they don't have an exit strategy in mind when they buy a property.
Educate yourself, learn your local market, and invest! Invest! Invest!
Real Estate Investor · Amarillo, TX · Member since 2008 · 173 posts · 15 votes
18y
#1 rule in rei - Tim already said it, it's not location, it's not even the numbers, it's the people.
The saying should go people, people, people
The right person makes the right numbers, the right decisions, who cares about location when you can turn a swamp deadland into million dollar condos(just example). Yes, location matters, numbers matter, business plans matter. However, above all is the investor
I too disagree.. There are so many credentials to be checked and we satisfied with our choice.. Location is one of the criteria and there are others too...
Real Estate Investor · Santee, CA · Member since 2008 · 3 posts · 1 vote
17y
Intresting I seem to share most of the same ideas on this forum.
I have to admit I am a bit nuts about moving forward with getting my lease apps and my showing times for new tenants.
I adopted the practice of "if the suns up..the office is open".