At first the investors should assess their situation and what is important to them in the following areas:
- Objectives – what are they trying to accomplish by investing in residential real estate? Why are they trying to accomplish that?
- Timeframe – when are they trying to make investments and over what period of time?
- Capital and Assets – how much can be contributed initially to a real estate strategy?
- Contributions over Time – will there be more contributed over time to buy or change additional real estate assets?
The following should also be factored in to the process when creating the strategy:
- Contribution – how much money, time, energy, stress, knowledge and skill will be contributed to investments initially and over time.
- Hands On vs. Hands Off – many investors buy close to where they live so they can address issues personally, others invest where it makes sense.
- Comfort Level – does the property fit the number of units, price range, neighborhood feel, condition, and capital requirements that you feel comfortable with?
- Risk Level – is there the right cash flow, reserves, equity position, market appreciation, and neighborhood stability to fit your priorities. See Areas of Risk.
- Capital Contributions – how much do you want to put in relative to the items mentioned above and expected/projected returns?
Considering these what is the strategies going forward? What are the next steps?
