Understanding Your Real Estate Investor’s Objectives

Each real estate investor looking for an investment has unique investment requirements that surround wealth objectives, financial restraints, and business considerations. These are issues you should understand and discuss with the investor so you are better informed to find investing opportunities that meet those objectives, and maybe not waste time looking for properties outside those objectives.

  1. Wealth maximization requires consideration of solvency, minimum yield expectations, holding period requirements, tax shelter, or profit maximization at some target risk level.
  2. Financial restraints may include the sources and amount of equity, the willingness to incur indebtedness, and the availability of favorable terms of financing.
  3. Business considerations may involve limitations on time or physical ability to manage the investment or perhaps a requirement that the property be located within a certain distance of the investor or his or her other investment real estate.

Real estate investing is subject to variation depending upon both the type of investment possibility, the submarket in which it is located, and the needs of the investor. What we’ve shown you are some common considerations but are not exhaustive. Therefore, the more you understand about the investor’s unique requirements or property attributes, the better you can tailor your search and real estate analysis presentations.