Investment needs to focus on the quality and potential of real estate

[Lilia Matlov]

A lesson I learned later is that real estate is not just about numbers, which is contrary to the thinking of most investors. Focusing solely on numbers often leads to the purchase of low-quality properties. For example, in the New York area, especially in some hyped-up fringe neighborhoods (like certain areas of the Bronx, Queens, or Staten Island), finding a "bargain" seems easy. Inexperienced investors rush to buy these properties, only to find themselves with a heap of trouble. Yes, you bought what seems like a good deal on paper, but in reality, you own an old apartment building in a neighborhood with poor security, possibly surrounded by long-vacant shops, streets piled with garbage, and a poorly managed community. How many tenants or buyers would really be interested in such a property? That's right, only those willing to compromise.

This is also why many so-called "creative financing" deals often involve low-quality properties. The reason sellers cannot sell these properties through the traditional market is often due to certain issues, and 98% of the time, these issues are not beneficial to you as a buyer. Smart investors first focus on finding quality properties—such as those in thriving areas of Brooklyn or potential neighborhoods around Manhattan—and then reverse engineer the process by improving management, optimizing rental structures, or enhancing facilities to make it worthwhile. If I had grasped this concept five years ago, my achievements today would be even greater.

[V.G Jason]

Quote from @Lilia Matlov:

A lesson I learned later is that real estate is not just about numbers, which is contrary to the thinking of most investors. Focusing solely on numbers often leads to the purchase of low-quality properties. For example, in the New York area, especially in some hyped-up fringe neighborhoods (like certain areas of the Bronx, Queens, or Staten Island), finding a "bargain" seems easy. Inexperienced investors rush to buy these properties, only to find themselves with a heap of trouble. Yes, you bought what seems like a good deal on paper, but in reality, you own an old apartment building in a neighborhood with poor security, possibly surrounded by long-vacant shops, streets piled with garbage, and a poorly managed community. How many tenants or buyers would really be interested in such a property? That's right, only those willing to compromise.

This is also why many so-called "creative financing" deals often involve low-quality properties. The reason sellers cannot sell these properties through the traditional market is often due to certain issues, and 98% of the time, these issues are not beneficial to you as a buyer. Smart investors first focus on finding quality properties—such as those in thriving areas of Brooklyn or potential neighborhoods around Manhattan—and then reverse engineer the process by improving management, optimizing rental structures, or enhancing facilities to make it worthwhile. If I had grasped this concept five years ago, my achievements today would be even greater.

 Quality over quantity is a ridiculously underrated point on here, despite some of us stating this ad nauseum. 

If you're investing in real estate, ask yourself can you hold this a minimum of 8 years, ideally 12, optimally north of 20? This is the through the ups & downs. If so, invest.

Then, ask yourself does this property provide the characteristics you need for it to give you your return-- location, rental demand, buying demand, physical structure, etc. Not it needs to be X% CoC or ROI, no short-term metrics. Focus on the physical aspect of physical assets. If so, invest.

Then ask yourself if you're financially fit; can afford this property to make it 1.25 DSCR and have significant reserves for vacancy, capex, lead times, etc. If so, invest.

It's not let me find some deal for me-- the lowest hanging fruit. It's about making the right deal for you. Not sure the columbus folks will like to hear this, but it is what it is.