When a professional investor is looking at residential real estate deals they are looking for a few things:
- Solid returns – they want to be paid regularly and for a long time.
- professional team – they want their team to be ahead of any problems which may arise, and able to avoid them whenever possible.
- stable markets where they won’t lose too much due to market drops from volatility
- best relative value within the market place – they look for a deal within the type of properties that look best to meet their investing objectives
- long term appreciation
- want to be able to leverage the capital they have
- tax benefits to reduce outflow to IRS
they are also looking for a few things not to have. For example:
- lots of turn over – they don’t want the costs and expenses and hassle of frequent turn overs
- maintenance issues – they buy solid properties that don’t need a lot of work over time and will provide a stable place for tenants to live long term
- a killer ROI – the numbers don’t represent everything in real estate so they are not lured in by projected high cash flow
- problems that consume their time
