Successful investors live the power of the Max-ism above. They know what gets measured gets attention, and, it is this attention to financial performance that helps investors maximize returns. Conducting a comprehensive and accurate financial performance analysis of income producing real estate is THE most differentiating activity between successful investors and unsuccessful investors. Successful investors also know that financial performance analysis provided insights into what changes need to be made to continuously maximize returns.
Current Market Research for Western PA: A Financial Picture
Below you will find market "snapshots" for multi-family properties and residential properties for 8 counties in Western PA. For the multi-unit properties, a REIA Report: Best Buys List was run, where we analyze the financial performance of ALL the residential rental properties at the same time in a given area, and sorted the outcomes to CFAT (Cash Flow After Taxes) and report our findings. To be included in any of the CFAT lists, the property had to have reported income and expense data at a confidence level of 3, and report generating CFAT of $1,000 or more. We have included the residential property data for those investors most interested in using single family residential properties in their investment strategy.
Why do we spend the time to find every single one of the 91 properties whose calculations reported a positive cash flow? Because why would we, or you, waste time on a property if it doesn't have the ability to meet or exceed your investment goals? We can also use our analysis to find properties that provided the highest tax shelter limits allowed by the IRS. To learn more about all the different ways we analyze the financial performance of income producing properties, see REIA Report Versions below.
Looking at the Multi-Family Unit chart below, a couple questions beg to be answered: With all the potentially cash flow properties available on the market:
Q: Why did 84% of the sold properties fall into the negative cash flow category?
A: Our experience shows that one of the four below may be the answer
1. They failed to look at more than one property at a time
2. They failed to conduct a comprehensive financial analysis before entering a contract
3. They failed to identify HOW they would generate financial benefits across the Four Pillars
4. The criteria they used to make investment decisions was- Hope!
In the chart below, you might notice that nearly 13% of all the residential properties available for purchase were listed at or under $50,000, 21% of all houses that went under contract were listed at or under $50,000, while 11% of all the residential properties closed on last month listed at or below $50,000.
REIA Report Versions
Max Wilson invented and developed a full range of REIA Reports (Real Estate Investment Analysis Report) to meet the needs of his investor clients who needed a third-party independent financial performance analysis of a property. The reports can be used by sellers to support the list price, by buyers to support their offer price and to achieve lending, and for decision making between partners.
All versions of REIA Reports are an easy and cost-effective tool for buyers, sellers, lenders, and agents alike to better understand the financial performance of an income producing property based on sound mathematical financial calculations. The reports are designed to meet the needs of investors looking to maximize returns when buying and selling income producing properties. To date, no other analysis tool, at any cost, is as complete, comprehensive, customizable, and accepted by lenders or all types around the country.
REIA Reports are available in the following formats:
• Investor: Answers What are all the investment benefits of buying this property
• Seller: Help to set sales, marketing, and negotiation strategies. Can also be used by buyer when securing funding
• Proforma: Calculates the potential performance of a property under stated conditions.
•Best Buys List: Reports the financial performance of the highest performing properties in the Pittsburgh PA region, based on investor criteria. Uses owner and agent provided data. Please note that this high-end analytical tool is available for purchase only by clients that have contracted us to fully represent them with our Traditional Full-Service Investor Buyer Representation services.
• Portfolio Analysis: Reports the financial performance of an investors entire income producing real estate portfolio- identifying those to keep and those to sell off. Also used to compare the financial performance of multiple potential properties before purchase.
• Executive Summary: Short version of REIA Report- typically requested by lenders. This is a supplement that can be ordered with REIA Report Investor, Partnership, or Seller Reports.
• Negotiation: Sets the framework for when a buying investor needs to negotiate the deal of an income producing property with a For-Sale-By-Owner seller.
• Self Storage: Analyzes current or potential financial performance for a storage unit complex.
• Mobile Home Park: Analyzed current or potential financial performance for a mobile home part.
Call Max at 412-552-9811 to discuss the property or properties you are considering for analysis. When you need to make an investment decision, and you want us to complete our comprehensive analysis for a property, two early questions that you will ask you to answer is: Who is providing the data for analysis? and Who do I contact with data and metric questions?