What Investors Are Buying in 2024 and Their Deal Criteria
Introduction
As a real estate investor, it is crucial to always be aware of the criteria and return expectations of other investors. Whether you are just starting out or have years of experience, understanding what deals are being sought after can help guide your own investment decisions. Recently, at one of our NVST capital meetups, we asked investors about their criteria for 2024. Here's what they had to say.
Key Takeaways:
Investors are adjusting their return criteria in 2024, with a focus on finding deals with a minimum of 6% return.
Multifamily properties, both small and large, are popular investment choices.
House hacking can be a viable option, but it depends on the location and interest rates.
Short-term rentals are attractive investments, with a target cash on cash return of 15-20%.
Networking and building relationships with other investors is crucial for success in real estate investing.
Angelina's Investment Goals for 2024
The Search for Duplexes and Fourplexes
Angelina, an investor we spoke to, shared her goals for 2024. She expressed her interest in purchasing two to four units, specifically a duplex or a fourplex. Additionally, she mentioned her desire to venture into mid-sized multifamily properties, ranging from 10 to 20 units. When it comes to returns, Angelina mentioned that she used to look for anything greater than 10%, but with current market conditions, she is now considering deals with a 6% or higher return. She also mentioned that she prefers properties that require minimal work, such as basic renovations like painting, new cabinets, and flooring.
Ian's Deal Criteria for Multifamily Properties
The Importance of Subject-to and Creative Financing
Ian Cruz, another investor we spoke to, shared his deal criteria for multifamily properties. He mentioned that he has different buckets for different types of deals. For subject-to deals, he looks for a minimum of 10% cash on cash return, taking advantage of low interest rates. However, for larger multifamily properties, he aims to purchase distressed deals at a significant discount. His strategy involves buying below the appraised value and forcing appreciation. Ian emphasized the importance of turning these properties around and maximizing returns upon exit.
Ian's Change of Heart on House Hacking
The Impact of Life Situations on Investment Strategies
Ian also shared his change of opinion on house hacking, particularly in the Bay Area. He used to advocate for house hacking, but after getting married and considering his lifestyle preferences, he now sees the benefits of renting in certain situations.
He explained that owning a duplex in an expensive market like the Bay Area may not be as advantageous as renting a single-family home. Ian mentioned that he has been exploring short-term rentals in popular vacation destinations like Branson, Missouri, where he can generate higher rental income.
The Importance of Networking and Research
As an investor, it is crucial to stay updated on investment criteria and market trends. The real estate market is constantly evolving, and what may have been a good deal a few years ago may not be the case today. That's why networking and research are essential.
Shifting into Commercial Real Estate: Liam Delumpa's Journey
Liam Delumpa is currently focused on industrial or multi-tenant retail buildings with a minimum purchase price of one million dollars. He believes that these properties, located in the path of progress, offer great potential for growth and profitability. While his favorite deal so far is an eight-unit property, which he acquired for $561,000 and expects to sell for over $800,000 with minimal renovations.
The Power of Networking in Real Estate
Liam attributes his success to networking and emphasizes the importance of building relationships in the industry. He advises aspiring investors to read books, develop expertise in underwriting, and lead with value when networking. By bringing deals with ironclad financials and connecting with individuals possessing complementary skills, Liam has been able to source and close lucrative deals. He even credits a meetup event for introducing him to his current business partner and securing an eight-unit deal.
Wholesaling and Cold Calling: Carmen Mackinda's Insights
Carmen Mackinda, a wholesaler, shares her experiences and advice for those interested in wholesaling and cold calling for sub-two deals. She provides insights into her sales process, deal criteria, and the importance of commitment and consistency in this competitive field.
Carmen's Sales Process and Deal Criteria
Carmen's team makes an impressive 250 to 300 dials per day to find potential wholesale deals. While the process may be challenging, she emphasizes the importance of staying committed and consistent to achieve success. Carmen's deal criteria include commercial, multi-family, and single-family properties that have the potential to generate revenue.
Revenue-Generating Potential
When it comes to deal criteria, Carmen focuses on commercial, multi-family, and single-family properties that have the potential to generate revenue. She understands the importance of finding properties that can provide a steady income stream, allowing her to maximize her profits. By carefully analyzing each potential deal and considering its revenue-generating potential, Carmen ensures that she is making sound investment decisions.
Carmen's Favorite Deals and Long-Term Projects
One of Carmen's favorite deals from the previous year is a five-unit property in Manteca. While it has been a long-term project, she expects it to yield significant revenue in the future. Although she cannot disclose the exact amount, Carmen mentions making $25,000 on a wholesale assignment. This success showcases her ability to identify profitable opportunities and capitalize on them.
In the world of wholesaling and cold calling, commitment and consistency are key. Carmen Mackinda's dedication to making 250 to 300 dials per day demonstrates her unwavering commitment to finding potential wholesale deals. By staying consistent and persistent, she has been able to achieve success in this competitive field.
When it comes to deal criteria, Carmen focuses on commercial, multi-family, and single-family properties that have the potential to generate revenue. This strategic approach allows her to maximize her profits and ensure a steady income stream. By carefully analyzing each potential deal and considering its revenue-generating potential, Carmen makes informed investment decisions.
One of Carmen's favorite deals from the previous year is a five-unit property in Manteca. While it has been a long-term project, she expects it to yield significant revenue in the future. This success story highlights Carmen's ability to identify profitable opportunities and capitalize on them. With her expertise and commitment, she has been able to navigate the challenges of wholesaling and cold calling, proving that success is possible with the right mindset and approach
Conclusion
In conclusion, when it comes to buying real estate in 2024, investors are looking for deals that work, particularly in the multifamily sector. The criteria for a good deal may have shifted due to factors such as interest rates and market conditions. Investors are now aiming for returns of around 6% or higher, and are willing to do some basic renovations to make the property rent-ready. Additionally, there is a growing interest in house hacking and short-term rentals, with investors seeking cash on cash returns of 10-20% and exploring opportunities in different markets like Missouri. Overall, staying informed about current criteria and networking with other investors can greatly benefit those looking to make successful real estate investments in the coming years.
It highlights the experiences and lessons learned from individuals who have shifted into different asset classes, such as commercial real estate. Liam Delumpa shares his transition from fourplexes to industrial commercial real estate, emphasizing the importance of networking and bringing value to the table. Carmen Mackinda discusses the process of wholesaling and the commitment required to succeed in this field, including making 250-300 dials a day. Additionally, the post provides perspective on the opportunities and advantages of the United States compared to other countries, such as Ghana, in terms of access to credit, buying cars and houses, and retirement options. Overall, it is clear that seizing opportunities, staying committed, and having gratitude for the advantages we have are key lessons to be learned from these experiences.
