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4 Factors to Look at When Building a Buy Strategy for Single-Family Homes

What factors should real estate investor’s in single-family homes consider when acquiring properties? How do you build an effective long-term buying strategy?

DSNews recently published an article “Building an Effective Acquisition Strategy," by Brian Honea, that we have summarized below.

1. Look for Price Appreciation Potential

“We look at markets, in order to satisfy both criteria, that we think show the greatest promise for upside potential in the near and long term,” said Leonard Blangiardo, Principal, Domaine Realty Advisors Inc., which does both fix-and-flip and buy-and hold, “as well as those that have the best relationship between unit cost and current achievable rent.”

2. Buy at a Discount from Historic Peaks

The article went on to say that Blangiardo analyzed the top 50+ markets in the country by population – metro areas with higher than one million people. “We look at things like embedded upside—what is today's value down to the address level for a specific property relative to what the highest historic peak value was for that unit, and if there is a significant difference in those two whereby we can buy it a significant discount to historic peak.”

3. Look for the Best Combination of Gross Yield and Embedded Upside

The next steps, according to the article, are to first “look at markets that have the best combination of gross yield and embedded upside or discount to historic peak value. Then, get more granular. “We'll look at what our reasonable expenses would be down to the address level before we actually pursue a specific acquisition or number of acquisitions.”

4. Look for the Potential Net Yield

Net yield is the most important number, however, according to the article. Net yield can be impacted by the level of pride of home ownership in the neighborhood and the crime rate.

For more information on why you should consider investing in a professionally managed portfolio of single-family homes, please contact Harold Willig at 917-209-4452 or harold.willig@springviewinvestments.com

Harold Willig is the Manager of SpringView Investment Management, LLC, which he founded in 2012. Mr. Willig also served as HFZ Capital Group’s Chief Financial Officer, and was responsible for the oversight of HFZ's Finance and Accounting team. He has over 17 years of finance and accounting experience. Mr. Willig also ran a consulting practice and provided valuation, analysis, and transactional support services to multi-billion dollar real estate companies. Previously, Mr. Willig served as the Senior Controller and Vice President of Financial Analysis and then the Chief Financial Officer of the Athena Group, a multifamily development company and fund manager.

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