AAOA Blog

SECRETS OF EVALUATING AND SELECTING UNDERVALUED PROPERTIES

an interview with Ron Brock, Sr., President and CEO: Pierce Eislen

As many savvy investors know, Pierce Eislen offers real estate market research needed to evaluate investment properties. 

Subscribers receive current and complete information on specific properties with 50+ units, and current market conditions for the area with a few clicks of the mouse. 

While their services are available of any area, Pierce Eislen directs its attention to the West, the Southwest, and it currently expanding into the Southeast, specifically Dallas/Ft. Worth. 

Ron’s first rule of thumb: “Each market is either improving or declining. A market may be improving slowly or declining rapidly, but it is never static.” 

An investor needs to identify their objectives, and find the corresponding market. 

• A slow growth market may allow the best potential for stable rents.  This is the place to look if your objective is cash flow. 
• High-growth markets like Phoenix, where the population is burgeoning, allow for higher appreciation.  But be careful, Ron warns. “It could go the other way just as quickly.”

Within the markets identified as consistent with an investor’s objectives, Ron finds a submarket with potential properties.

• “Look to where the properties have higher potential than currently realized.  A great example is a cluster of apartments where the rents don’t reflect the new improvements in the area.  The rents haven’t yet been adjusted upwards.”

While Ron finds some potential properties from broker listings,  over half of the properties sold are off-market. 

• “Most investors will find the property they want, then approach the owner for the sale.  You’ll still pay market value, and probably still need to work with a broker, but it avoids ”a beauty contest” over a new listing, and may mean the difference between getting the property and losing it in a bidding war.”  

Want to read more of Ron’s secrets? This exclusive interview is included on the American Apartment Owners Association’s CD series, Real Estate Investment Secrets, twelve exclusive interviews with industry experts that will supercharge your ability to locate the best investment properties and manage or sell them for maximum profit. 

Real Estate Investment Secrets is available for purchase from American Apartment Owners Association. Join as a Premium Plus member, and receive all of the benefits of our association including Real Estate Investment Secrets as our gift for joining.  Visit www.joinaaoa.org for more information. 

Check back for next week’s feature, “Tenant Screening: Little Known Secrets to Avoid Big Mistakes,”  with Jeff Cronrod, CEO of Fidelity Information Corporation.

Missed Part One, “How to Buy, Reposition and Resell Income Properties for Maximum Profit” with Daron Campbell, Managing Partner, RE/MAX Commercial Real Estate?  Click here.

Missed Part Two, “Finding the Right Real Estate Broker” with David Potarf, National Multi Housing Group: Marcus and Millichap? Click here.

American Apartment Owners Association offers discounts on products and services related to your commercial housing investment, including tenant debt collection, tenant background checks, insurance and financing.  Find out more at www.joinaaoa.org.

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Interested in commercial financing.  See our blog feature Two Reasons to Invest in Commercial Properties with Jeff Mack.            

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