How To Analyze A Real Estate Investment Depends On Your Strategy
When looking at real estate for an investment, there are different ways to analyze that property depending on what your exit strategy is.
And by that, I mean you have to know what you want to do with that property prior to making an offer on it and prior to purchasing it.
For example, let’s say you are looking for a property to fix and flip. So based on a fix and flip exit strategy, you are going to look for a property that needs repairs.
You are going to look for a property from a motivated seller.
The property may need repairs and maybe there is some debt on the property. Maybe the owner is behind in their mortgage payments, whatever the situation you go in and you look at the property with your exit strategy in mind.
This will also depend on the type of renovation that you are doing. It could be as simple as putting in carpets and doing a paint job. It will depend on what you’re doing as a wholesaler, and what the cash buyers that you’re working with are looking to do with the property.
Sometimes these cash buyers are okay with a major fix, and that’s what kind of property they are looking for.
They are looking at buying properties for 50% of their after repair value so that they can put in another 25% of renovations and then sell it at full market value and make 25% on the deal.
So that’s what you look for if you are looking at properties for fix and flips.
Another way to look at a property is if you are looking at buy and hold.
You want these properties to be in fairly good condition.
You can buy a property that gets good rent and has a good rental history and that you don’t have to do a lot of work. By the way, I don’t recommend buying single-family homes for long-term rentals. This would mean that you are looking at a totally different type of property for long-term rentals.
So in this case, I would look at properties that are multi-family homes for long-term rentals, usually four units plus or maybe even apartment buildings.
But again, the type of property you look for depends on your exit strategy, depends on what you want to do with these properties.
It’s very important to understand what your exit strategy is when you’re analyzing properties
There are a number of things that you need to take into consideration. For example, the condition of the property, the price of the property, and how much rent you can charge. And also, what are the goals of owning that property?
That is what you need to do if you are going to look at a property and make sure you understand the exit strategy associated with that property.
