What price should you pay for investment real estate?

By Bruce Firestone | Business Coaching

Jun 29

I teach/mentor/coach a buy and hold strategy when it comes to real estate investing. It’s also a truism that you make money in real estate when you buy not when you sell (and since I teach folks to hold property for at least 3-generations), purchasing well-located properties at a decent price (ie, buying smart/buying low) initially is really important.

SO, DON’T OVERPAY!

But how do you figure out what price to offer/pay for your next investment property?

[instructional video]

Whether it’s a single family rental, a duplex or triplex, a tenplex, a small plaza, a mini storage business or a boutique hotel (which I analyze in this video), the process is the same–you figure out what the existing NOI (net operating income) is, divide that by your target cap rate (capitalization rate) and, presto, you have your answer.

I also show here (the url for the above video is, https://youtu.be/Jw6bfaGy8l4) how to animate this boutique hotel property (that is add additional income streams) and raise cap rates (ie, ROI, return on investment), which raises the question: Who should benefit from that increased ROI–you the buyer or the original seller?

The animation example I use here is the addition of 6 excellent glamping (glamorous camping) yurts from former architecture student of mine Anissa Szeto’s company http://yurta.ca/.

FOR REAL ESTATE INVESTMENT AND BUSINESS COACHING THAT’LL HELP YOU PROVIDE FOR YOURSELF AND YOUR FAMILY FOR 3-GENERATIONS, PLEASE CONTACT:

Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD

Real Estate Investment and Business coach

Century 21 Explorer Realty Inc broker

Ottawa Senators founder

1-613-762-8884

bruce.firestone@century21.ca

twitter.com/ProfBruce

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brucemfirestone.com

-MAKING IMPOSSIBLE POSSIBLE

-FREEDOM VIA REAL ESTATE INVESTMENT AND PB4L, PERSONAL BUSINESS FOR LIFE

-FEHAJ, FOR EVERY HOME A JOB

-MAKE YOUR HOME WORK FOR YOU, INSTEAD OF YOU WORKING FOR IT

-HIGHER ROI NOT JUST FOR OWNERS AND INVESTORS, BUT FOR TENANTS, GUESTS, VISITORS, NEIGHBORHOODS, COMMUNITIES, TOWNS, VILLAGES, AND CITIES TOO

Image source: By U.S. Navy photo by Mass Communication Specialist 2nd Class Kevin L. Burleson – This Image was released by the United States Navy with the ID 061106-N-1023B-014 (next).This tag does not indicate the copyright status of the attached work. A normal copyright tag is still required. See Commons:Licensing.বাংলা | Deutsch | English | español | euskara | فارسی | français | italiano | 日本語 | 한국어 | македонски | മലയാളം | Plattdüütsch | Nederlands | polski | پښتو | português | svenska | Türkçe | українська | 中文 | 中文(简体)‎ | +/−, Public Domain, https://commons.wikimedia.org/w/index.php?curid=8182045

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About the Author

Bruce is an entrepreneur/real estate broker/developer/coach/urban guru/keynote speaker/Sens founder/novelist/columnist/peerless husband/dad.

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