MARKET RESEARCH Successful investors rely on multiple data sources to make informed decisions. Historical property data, including days on market and price trends, form the foundation of market analysis. You can find this information through several organizations and websites (e.g., the National Association of Realtors, Zillow, Redfin, the National Association of Home Builders, and local community websites). Don’t forget to get involved in key groups supplying a mountain of industry knowledge (e.g., American Association of Private Lending and Think Realty). To go where the deals are, investors benefit from analyzing specific neighborhoods rather than broad citywide statistics. However, staying close to home (no more than regular drive-by check-ins) is the best practice. Conducting a thorough market assessment examines population growth, homeowner growth, job opportunities, economic indicators, and price-to-rent ratios. It also includes evaluating local development plans, vacancy rates, and market saturation. A property evaluation checklist should include: ▷ LOCATION QUALITY AND NEIGHBORHOOD AMENITIES ▷ PROPERTY CONDITION AND AGE OF MAJOR COMPONENTS ▷ ZONING REGULATIONS AND FUTURE DEVELOPMENT POTENTIAL ▷ ECONOMIC INDICATORS AND EMPLOYMENT TRENDS ▷ SCHOOL RATINGS AND PROXIMITY TO PUBLIC TRANSPORTATION
recognize that an interest rate of 7% on a new mortgage could double their monthly payment with the same-sized mortgage. As such, existing homeowners are not freeing up housing stock to the degree necessary, leaving demand to outweigh supply and affordability. Nevertheless, housing starts are projected to reach 1.45 million units in the coming years, addressing some supply gaps while staying slightly below the historical average of 1.5 million units annually. New housing offers are getting creative to help lure homeowners out of the potential rehab property and into a larger, newer home. Active investors need to stay plugged into market conditions and credible partners to help them find pre-market deals. The good news is identifying products to help make the purchase is becoming less of a challenge, especially for seasoned investors with good credit and stable liquidity. With rated and more securitizations happening monthly, capital providers are extending credible Residential Transition Loan (RTL) lenders plenty of capital to fund their next loan— meaning more lenders are competing for business on price and products to fit your needs. Still, it’s essential to do your homework to identify the best lender, account executive, and product to obtain the best financing for your needs. Two primary approaches stand out as you choose your investment strategy based on market analysis and investment goals. FIX AND FLIP. Fix-and-flip 101 strategy involves purchasing distressed properties, renovating them, and selling them at a profit. This approach typically yields $25,000 to $50,000
per project, and success depends heavily on accurate market analysis and renovation management. Key considerations for successful flipping include identifying the right location, researching economic conditions, and maintaining strong relationships with local realtors and contractors. For optimal results, professional flippers target cities experiencing significant job growth and positive economic activity. Similarly, they prioritize properties in neighborhoods with all-around growth, strong renovation trends, and housing demand, ensuring better resale potential. BUY AND HOLD. This strategy focuses on acquiring quality properties for long-term wealth-building through steady appreciation and rental income. Buy-and-hold investments typically generate stable portfolio growth. Properties under this approach provide consistent monthly rental income, ranging from $1,000 to $2,000. Buy-and-hold offers several advantages: ▷ STEADY APPRECIATION OVER TIME ▷ TAX BENEFITS THROUGH DEPRECIATION ▷ MORTGAGE INTEREST DEDUCTIONS ▷ GROWING EQUITY AS LOAN BALANCES DECREASE ▷ BUILDING GENERATIONAL WEALTH Success in buy-and-hold investment hinges on two primary elements other than mastering the art of property analysis and market research: (1) find properties with enough of an increase in value after repairs to pull money using the BRRR method and (2) stay true to not over-improving a property by focusing on durable and appropriate repairs.
thinkrealty.com | 27
Made with FlippingBook Online newsletter