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.