6 Real Estate Investment Basics

Miami real estate investor Kenneth D. Rosen outlines his “Big Six” investing guidelines in his new book, Investing in Income Properties.
By: Matthew Haggman: REALTOR®Magazine
Here are his six principles in a nutshell. He says all of them need to be present to make a deal worth doing. “If one’s not there, you stop and you don’t buy,” he says.

Location. “A” locations are in areas where there is little land left to build on and the neighborhood has a certain prestige.

No-frills design with quality construction. He looks for three or four parking spaces per 1,000 square feet, no more than 15 percent of space devoted to common areas, and simple but visually pleasing design.

Few or no vacancies. Buildings with lots of small offices are easier to keep full than those that rely on renting out entire floors to one tenant.

Potential for appreciation. Older buildings with lower rents have the most upside potential. As leases expire, the new owner can raise the rent.

Available financing. Find a financial pro to help negotiate the right provisions.

Sale price based on existing income. Avoid buying based on projected income.