Top Three Things You Look For In a Real Estate Investment In Eugene Oregon

Top Three Things You Look For In a Real Estate Investment In Eugene Oregon!
I was asked recently how to find a good real estate investment, and it boils down to just three things:

1: Value Add
2: Price of the Property
3: Extent of Repairs


Before you consider purchasing a property, make sure you have a grasp on all three, because if you don’t, the investment could become a liability.

Here is more detail on the top 3 things to look for in a real estate investment. 

Value Add

The number one thing I’m looking for when we’re out hunting down real estate investments is a value add investment. We consider ourselves at Grand Real Estate Investments value add investors, and that means we’re always finding a property that adds value in the end. That allows us to refinance and still maintain our equity position of 25 plus percent on the property depending on the property.

There are a few ways that you can achieve this. First, you can get a good deal on the house because it’s run down and in need of work. If you can control your repair costs, and the numbers come in right, then you can make it inside that window. 

Second, value add can mean adding square footage to the house. If you have a two-bedroom, one-bath house, 800 square feet, maybe you can make it a three-bedroom, two-bath house at 1200 square feet. If you have your cost per construction down, then you’ll be able to create that equity window you need in order for lenders to refinance your property as an investment property. The magic number is 25%.

Get a Good Price For the Property

It’s hard in times when the market’s really hot and people can easily sell a property.  There are a lot of investors who don’t run it by the numbers and play it exactly how they should, and it can catch them in the end. But if you play it by the numbers and subtract repair costs from the price, and from that, pay 75% of the after repaired value for the property, then you should be able to make those numbers work. 

Price is key, and there’s a lot of properties where we just don’t come to an agreement on the price because our repairs don’t align with the price that they’re asking. Somebody else may pay it. Somebody else may take that risk, but at Grand Real Estate Investments that’s not a risk that we’re willing to take.

Extent of Repairs

If you buy a property with major issues, you have to calculate the extent of those repairs. How long is it going to take you to get that property back up and running? Is that timeframe worth it? Is that loss in revenue and that loss in income truly worth it?

Conclusion

In the end, if you’re looking to buy an investment property, consider those top three things. 

Is it a value add opportunity? 
Can I get a good price on it? 
Are the extent of the repairs and the cost of those repairs worth doing to this property? 

If you have any questions, reach out to me in a direct message or fill out the form below and you can join our mailing list for even more great advice on investing in real estate. 

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Robert Grand

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