Accountant · Dundalk, MD · Member since 2013 · 27 posts · 2 votes
Hello,
I am completely new to RE Investing... but have a strong analytical background (I am an accountant). I am meeting with a group of potential investors (I have some great single family deals in Pasadena, MD) and I want to make sure I WOW them!!!!
What do you (as an Investor) want to see? Is it as simple as...
Or is it really more like (or am I over analyzing)...
Property Price (or % of - Depending on Finance Option used) + Purchase Costs (Want to see as fixed and variable - or Estimates [rounded whole numbers]?) + Rehab Costs (Pro Forma style?) + Holding Costs (again; want fixed and variable - or estimates?) + Selling Costs (again; want fixed and variable - or estimates?) + Sales Price (Comps? Current Home Values (which is the same as ARV correct? - for a similar home of course) = PROFIT?
I know a couple of guys looking if you have anything good ..
Your numbers in Pasadena can vary greatly depending how far you go down Mountain rd , or how close you are to Severna Park . Pasadena feeds into 3 High Schools Glen Burnie , North East , and Chesapeake ,
Honestly all over... Some closer to Water Oak Point/Rock Creek, some over near the Magothy, some even near the Severna Park line. Good mix of Northeast, Severna Park, and Chesapeake. I know the area pretty well... all of my deals are in good neighborhoods, good elementary and middle schools, and most need (from first glance) cosmetic rehab. Some (like a deal on Rock Creek) could potentially have a small addition and easily put the AVR at 2.5 times purchase price. In all I have about 10 potential deals.
What type of information do your investors want to see? Broad pro-forma style estimates... or very detailed analytical deal makeups?
@Shawn McCarty if you're asking what your investors would want to see in your presentation then it is the former. But you should have an appendix with the later. But the most important metric is projected cash-on-cash return so you'll need to include that.
Investors will ask for different things depending on their background. Engineers will get into the details, marketing/sales people will want the summary. The exact presentation depends on your audience.
Great point on the appendix... I want to be as professional, efficient, but also simple as possible. What do you see as the easiest way to show a projected cash-on-cash return? There is not formula to produce an accurate figure because it all depends on revenue and expense correct? Do you project the investors return as a flat percentage or a percentage of profit?
The audience I am working with is a panel of "shark" style investors from different backgrounds.
What type of information do your investors want to see? Broad pro-forma style estimates... or very detailed analytical deal makeups?
The Most of the guys I work with know each other and all of them are contractors , from this area . All the info they would need is location and price .