If You're Actively Investing, What Would You Do?

Question

As we currently sit, interest rates are moving in a favorable direction meaning more and more buyers will begin to enter the market for investment properties. With a large increase in buyers, we can expect to see prices increase. Seasoned investors could care less what the interest rates - they are more worried about profit - while the laymen sit on the sidelines waiting for (a perceived) better opportunity.

To all "new" or inexperienced investors: What are you looking for? What is holding you back? If the perfect deal came around, what would it need to look like for you?

I now speak to the experienced investors: Where are you putting your funds? What type of properties do you look for? What are a few things you look for in a good deal?

Greg Scott · Answer

My investment criteria never changed. That means in the frothy times, it is harder to find deals that meet my criteria, so less money gets deployed. In challenging economic times, it is easier to find good deals, so more money gets deployed.

I've seen some great deals lately. I'm deploying more money now than last year at this time.

Alecia Loveless · Answer

@Brandon Coble My criteria doesn’t change. However my latest deal is an off market one that I found through my network.

Chris Seveney · Answer

You hit the nail on the head. Yes interest rates of course matter and the question is way to general to provide an in depth discussion. It is similar to asking "what is the best market to invest in"...

Tim J. · Answer

I guess I am not a seasoned investor... I do care about the interest rate at which I borrow money. Can someone explain to me why I should not care about interest rates?

As an unseasoned investor - I look for properties that can have a reasonable exit strategy, expected net profit when I exit, easy to rent, not a significant management headache, etc.

My criteria is pretty simple - with 10 to 20 percent down, can I manage the property and not lose money and will there be reasonable (or better) appreciation over the next 5 to 20 years? Are there ways to improve profitability or add value to the property beyond its current use?

Whole books have been written on the types of investments one could/should look for. What you ask is an unbelievably general question and not likely to be fruitful as so many people have interests in different asset classes, etc.

John Litz · Answer

Same criteria as always. Learn the market so you know the difference between average, good and great deals. Get your buy box down, remove all war zones from consideration, I personally look for 2-4 units for fixed rate debt. Understand what it will take to make rent ready. Know what is market rate for rents as well as what section 8 pays. Always analyze for long term numbers but in the back of my mind I look to see if it will be a good fit for possible MTR or STR. I live in an expensive area so nothing usually will even make its own mortgage payment at the listed or close to listed. You have to figure out which ones you like the best and put out an offer that actually makes sense. Disrespectful offers- no alligators ever!!!

James McGovern · Answer

My investment criteria never changed. it is harder to find deals that meet my criteria, so I have increased focus on identifying foreclosures where the price is often much lower than working with wholesalers?

Corby Goade · Answer

This is a very broad question, but you say that seasoned investors don't care about interest rates, only profit. By your logic, those two are directly correlated. All of us are investing for profit, we just find that profit in different strategies.

If You're Actively Investing, What Would You Do?

If You're Actively Investing, What Would You Do?

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