There are several proven ways to make a million dollars in commercial real estate.
There are also countless ways to make a bad decision that will leave you in dire financial straits for years.
If you examine the most successful commercial real estate investors and their best practices, one common theme becomes crystal clear:
The surest way to achieve success (and avoid mistakes) is to develop a proven process and consistently execute against it.
Deal evaluation is one area where you must have a battle-tested process and follow the same steps, in the same order, every time.
Following these steps without fail will prevent poor decisions and put you in the best position to succeed.
At 37th Parallel, we follow our process each and every time.
We start with the 5 features of every great multifamily market . This process allows us to focus only on the markers most suitable for stable multifamily investments.
If a deal crosses our desk and is not in one of these suitable markets, we pass. Why would we waste our time?
Once we have found a suitable market, we then evaluate each submarket. We find the areas most likely to support a stable high occupancy project.
If the project is in an approved market, but in an undesirable neighborhood, we move on to the next deal – no questions asked.
Only the Best Projects
Only deals that pass our market and submarket screens will be examined in detail. We look to see if the project has the right unit count, bedroom blend, tenant profile and meets several other key considerations. If it does, only then will we start to look at the numbers.
That’s right. We look at the numbers last.
Know What You Control, and What You Don’t
If you don’t understand the forces beyond your control in a market and how they will impact a long-term multifamily investment, you are making a bad decision.
Any deal will look good if you play with the numbers long enough.
But in reality, no deal will work if the market, submarket and neighborhood don’t support your apartment project and approach.
Poor Process Equals Poor Performance
Too many times we have met with investors who are losing money every month because they do not have a consistent deal evaluation process.
With a $100,000,000 performing portfolio with hundreds of delighted investors across 9 different time zones, we know what works.
We consistently follow the same process each and every time. Our clients depend on it.
You should do the same.
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