Profile picture for Flamingo Group MN

What are real estate investors looking for in this market?

  • May 10 2011 - Burnsville
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Answers (8)

Best Answer

There are really 2 types of investors in the market right now -

1 - Rentals - Looking for positive cash flow.  As Nathan said, probably starting at 8%+ returns. 

2 - Flips - Looking to buy low, fix & flip.  These ones are a little more dependant on getting as low a price as possible becuase they have to get it back on the same crappy market and hope it sells fast and for a profit

There are definitely more investors out there in the past year so it's getting a little more challenging finding properties.  It's important to be patient and do lots of homework about fix up costs, rental rates and holding costs.

  • May 10 2011
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Profile picture for Chase Lenz
Flips - You have to buy them right, do a good job of estimating all repair costs and after repair value. 
Run the numbers and if they don't work pass on the deal.
Too many people don't do their homework, underestimate costs, or don't estimate at all and wonder why they end up losing money on a house.

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  • January 24 2013
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Profile picture for Gregg Whitney

Looking for good cash flow with a good cap rate (the net divided by sales price, the actual return on investment).  A cap rate will depend on the area you are looking in.

  • May 16 2011
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A good cap rate of at least 9%  on an existing building.
30% or more under market value for a flip.
  • May 14 2011
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Profile picture for Flamingo Group MN
They are looking at location, price and the ability to either rent the property or flip it.  In other words ROI.  Now is time for them to buy, I have never seen the prices so low!
  • May 13 2011
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Yield of 7% cash on cash on nice safe lower risk residential units, in good shape, in low vacancy areas, in decent credit quality areas, HOA in good shape, etc.
  • May 10 2011
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Investors in this market are looking for the same things they always look for, such as cash on cash returns and potential for capital appreciation.  More particular to this market with the tremendous amount of distressed properties that have been run down, investors are looking to buy, fix up, and subsequently unload the properties.  Given the amount of people losing their homes, yet needing a place to live, rental rates have been steady, if not increasing.  Given the lower home prices, stable or higher rental rates, the opportunity for investors is tremendous and this is a golden opportunity for many people to start and/or add to their real estate holdings.
  • May 10 2011
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Most investors I deal with including myself are looking a minimum of an 8% return.
  • May 10 2011
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