Victor’s Insider Scoop on Why You Should Take a “Futurist” Approach When Analyzing a Multi-Family Investment Property
July 2nd, 2013 | top of page

When I speak with acquisition managers about their company’s acquisition criteria, it’s not uncommon for me to glean from their comments that what they’d ideally like to buy is a property they can classify as a steal to the investment committee.

I mean, what better way for an acquisition manager to justify his worth to his company than by demonstrating that he bought an apartment for substantially less than his bean counter’s formulaic spreadsheet said the property was actually worth at the time of purchase.

But is this one-dimensional approach the only way or, more importantly, the best way to evaluate a prospective investment property?

It’s been reported that Donald Trump has stated he’s over-paid for all of his best properties. Now, why would The Donald of all people want to over pay?

The key take-away from this assertion comes from asking yourself “What did he over pay relative to?”

I believe he may have over paid but only relative to what other investors thought the properties were worth based on their formulaic analysis.

One advantage to Trump’s tactic is readily apparent: he can out-bid other prospective investors and have the assurance of adding an asset he wants to his portfolio.

What the other investors are missing is that Trump buys based on his vision of the property’s future value. Through this shrewd tactic Trump is able to pay more than any other investor would consider prudent while simultaneously acquiring a property at what he sees as a bargain basement price.

It’s well known that Trump’s crystal ball is not perfect. He’s bought his share of dogs. But overall the guy has done pretty well. A few big wins easily mask the failures.

My big take away is that the really successful entrepreneurs don’t fear the failures. They’re out there trying to predict, or better yet, make future value.

So if you’re looking at multi-family properties in Phoenix and find that your one-dimensional analysis is keeping you from being competitive, then you owe it to yourself to give me a call at 602 320.6200 and see if our insights can give you the competitive edge you’re currently lacking. This is especially critical if you’re based elsewhere, are trying to gain a foothold in Phoenix and don’t really know the market.

We’ve had one investor resurrect a property they had relegated to their circular filing cabinet without making an offer. Our insights got them back in the game. Why not see what we can do for you?

Dedicated To Multiplying Your Income

PS – If you are ready to begin to thrive again by getting off the sidelines and putting your money to work give me a call at 602-320-6200. I see lots of deals and may have just what you are looking for.

2 Comments on “Victor’s Insider Scoop on Why You Should Take a “Futurist” Approach When Analyzing a Multi-Family Investment Property”

  • Brandon February 22nd, 2015 9:43 am

    Victor, you write that investors are trying to predict future values, what are some ways that you have seen, or performed yourself to predict future value that can be performed repeatedly with accuracy.

    I have always been taught to invest based on the numbers and cash flow in the present,and any value created in the future from rent increases, or equity built over time is icing on the cake.

    I am forever a student, so I would be interested in hearing more on your perspective you share in this post.

  • dootenay February 24th, 2015 2:47 pm

    Brandon … I’m not implying that I or anyone else has a crystal ball that predicts what to buy, when to buy it, or how much to pay. What I am saying is that if you’re more diligent when doing your homework on a property you may uncover something about the property itself, the immediate neighborhood, the trade area, etc. that other less diligent buyers have overlooked. Armed with this information you may see more potential value than your competitors. Then, like Trump, you can confidently outbid them knowing full well you’re likely to achieve your target returns. If you’re not familiar with the specific market where your target property is (e.g. you’re an “out-of-state” investor) then it’s prudent to hire a buyer’s broker who can help you find that diamond in the rough or, perhaps more importantly, steer you away from making a poor investment decision. Remember, a listing broker’s investment package is designed to sell a property and is unlikely to point out all its warts. I hope this helps. If you’re thinking of buying in metro Phoenix but don’t have local market knowledge then give me a call at 602 320 6200,

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