Oh boy ! Where do I start on this one. I am working on a project that I will probably invest in and this post is not just getting my thoughts out to you, it is also a cobweb clearing for me. I hope we all get something out of it.
Over the past 2 days I have looked at over 40 parcels of property and run calculations on the costs to renovate. I am calculating what the proeprty should be worth post renovation or reasonable upgrade, calculating the costs to cure, adding in holding costs, determining how much I want to make on the deal and coming up with a number that I would, as a reasonable investor, be willing to pay for the assets. Then I am going the next step. Figuring out how much I want to make selling this portfolio to a reasonable investor. Then I am figuring out what the costs would be if I needed to hold the properties longer to in order to sell them in smaller blocks and if I needed to pay co-op fees.
Now, after all of that math, I am researching the actual market comps through MLS and talking to friends who own in the areas.
This might sound like a lot of work, but we are talking about the difference between making money or loosing it. Even a break even can cost a true loss of revenue as I could be working on this project to keep from loss instead of working on others for profit.
Anyway, this was helpful to me.
Rich Kruse - rfk@gryphonusa.com
Richard F. Kruse is the President of Columbus, Ohio based Gryphon USA, Ltd. (www.gryphonusa.com). The Gryphon Organization includes Gryphon Asset Management providing receivership and consulting services in the distressed marketplace, United Country Ohio Realty & Auction Group (www.ucohiorealty.com & www.ucohioauctions.com) providing real estate brokerage and auction services throughout Ohio and OnlineAuctionUSA.com (www.onlineauctionusa.com) providing commercial asset liquidations from the Midwest to East Coast.
United Country Ohio Realty & Auction Career Opportunities Available. Call 614-885-0020 x 17
;)
;)
Every investor should have a formula for determining whether or not a property fits into their investment plan.
Depending upon each person's skill, knowledge & end-goals one property may be a perfect fit for one investor & a definite NO for another.
Before anyone begins investing they need a plan & to stick to it.
I get many calls from prospects looking to start investing & all they know is that 'they are looking for a good deal'.
That's not investing, that's simply buying property. Could turn out but it's not being an investor in the least.