Revere case study
1. I would do the following 4 market research and planning before investing an apartment:
Research on the whole real estate market, especially the market for small apartment buildings:
To identify whether the real estate market is going up, for example, by analysis the trend of the capital ratios, and then get the whole picture of the real estate market.
To make a segment research on the market of small apartment buildings. After collecting the history data of the selling prices and rents, to forecast whether it is worthwhile to invest in the market of small apartment.
To look for several investment targets and, for example, to decide an ideal city or even residential section to buy the building, taking the location, situation, broker, etc into consideration.
To make the income and expenses projections and get a draft of the investment setup:
With the information collected in the first step, to set reasonable assumptions, including rents, vacancy, renovation cost, operating expenses, etc and calculate the future cash flow, potential profits and expected return.
To use scenario analysis, if necessary, and change the assumptions under different market situations to get a whole picture of future possibilities.
Planning for own equity base and making an investigation for the mortgage market:
To make sure about my own savings and cash used for real estate investment as well as the budget in the following years.
To visit saving banks and find out the mortgage or loan which can be provided.
To get legal advice on the future transaction and estimate possible risks.
The most important factors I could focus on are
The expected returns of the whole market: By analysis the expected return of the whole real estate market, I can decide whether it’s an ideal time to invest.
The expected return of potential investment building: By generating my potential investment return and comparing it with the return of the real estate as well as
Research on the whole real estate market, especially the market for small apartment buildings:
To identify whether the real estate market is going up, for example, by analysis the trend of the capital ratios, and then get the whole picture of the real estate market.
To make a segment research on the market of small apartment buildings. After collecting the history data of the selling prices and rents, to forecast whether it is worthwhile to invest in the market of small apartment.
To look for several investment targets and, for example, to decide an ideal city or even residential section to buy the building, taking the location, situation, broker, etc into consideration.
To make the income and expenses projections and get a draft of the investment setup:
With the information collected in the first step, to set reasonable assumptions, including rents, vacancy, renovation cost, operating expenses, etc and calculate the future cash flow, potential profits and expected return.
To use scenario analysis, if necessary, and change the assumptions under different market situations to get a whole picture of future possibilities.
Planning for own equity base and making an investigation for the mortgage market:
To make sure about my own savings and cash used for real estate investment as well as the budget in the following years.
To visit saving banks and find out the mortgage or loan which can be provided.
To get legal advice on the future transaction and estimate possible risks.
The most important factors I could focus on are
The expected returns of the whole market: By analysis the expected return of the whole real estate market, I can decide whether it’s an ideal time to invest.
The expected return of potential investment building: By generating my potential investment return and comparing it with the return of the real estate as well as