The real estate investment process involves an in-depth portfolio evaluation, market studies, property and cash flow analyses, and closing document administration, each of which an Arkansas real estate consultant can walk through with the buyer.
For over 45 years, Arkansas real estate consulting firm Ferstl Valuation Services has navigated the complexities of investing in commercial and residential properties. From the initial consultation through the final purchase of property, we work closely with investors to determine the best way to add value to their real estate portfolio. The complete start-to-finish transaction time varies; however, the typical investment will normally have a 90-day time frame.
Within the First 30 Days:
Initial Consultation
It’s important to sit down with a real estate consultant when you first begin considering investing in any kind of property. During this initial consultation you will discuss financial goals, current expenses, property wish lists, and investment resources. Together you and the property expert will review your finances, determining the assets you currently have that may help to support and maintain another piece of property in your portfolio. If you have all your documentation together prior to your first meeting, this step only takes a few hours, and it begins your initial search for an investment property.
Property Determination
Based on your portfolio review, your real estate consulting professional will then discuss the type, location, and value of property that will best meet your goals. Once a property type and location is established, it’s time to begin searching for qualifying properties that meet these criteria and compare up-front expenses for each. This search may only take days, or it may take several weeks or months, depending on the specifics of your search criteria and the current market saturation.
Between 30 – 60 Days:
Property Investment Analysis
Calculating the final cost of a property and your potential risks and return value are critically important during the search process. After touring your potential investment properties, you may find an option you love that needs significant upgrades or repairs, and you have to consider these costs and the potential loss of income as repairs are completed.
ROI
The ROI, or Return on Investment, is the most important calculation to make as you consider each potential property on your list. We work with investors to determine the ROI, looking through the costs associated with managing the property and your monthly cash flow to determine the benefits of each potential property as you get closer to deciding which one you want to purchase.
The Add-on Factor
If you will be leasing property by the square foot, the add-on factor is a key determining measure. The add-on factor refers to the amount of property that can be rented versus the total square footage of usable property. The higher the efficiency percentage, the more profitable the property will be once you own it.
Establishing Financing
At roughly day 45 in the 90 day process, you will begin to file paperwork to get a mortgage or other financing approved for the property you would like to buy. Your Arkansas real estate consulting firm will work with you to help complete all necessary paperwork (contracts, deeds, permits, etc.) in a timely manner to execute the transaction.
Days 60 – 90:
Completing the Purchase
Once you have chosen your investment property, and financing is approved, it is time to schedule the closing. Closing takes place when the seller is ready, and after all necessary inspections and appraisals have been completed. Generally, you can expect to close 30-45 days after an offer has been accepted.
After the Transaction
Once you officially own a piece of property, you will need to have that property managed effectively in order to protect your investment. If this is your first property, you might be able to keep track of all of the property needs on your own. If you are building a portfolio of investment properties, we highly recommend hiring a property manager or working with a property management company.
Ferstl Valuation Services is one of the top real estate consulting firms in the Arkansas. When you are ready to invest in your next commercial or residential property, contact Ferstl Valuation Services for real estate consulting or call 501-313-0641 to set up your initial consultation.
