Gus Dahleh’s Models For Determining The Values Of Investment Properties
The traditional viewpoint is that Investing in real estate produces consistent income and that the return is almost guaranteed. However, modern innovations have created an outlook that makes real estate investing even more appealing.
And since the comprehensive analysis of data is much easier these days. Not only is Gus Dahleh, a man with over $50 million of commercial real estate investments, able to make well-informed decisions, but there is a wide array of investment vehicles available to everyone, including you.
Today, you can decide what holds the best value, and specific strategies can help you make the best investment decisions.
If you want to learn how to profit in real estate properties as Gus Dahleh do, then learning his models in determining the values of investment properties will be your first step to financial success.
Comparing Sales Prices
Gus Dahleh believes the traditional method of finding properties that hold the best value is proven and tested. Sales comparisons of properties in the same area give you an idea of what to look for.
Naturally, you’re looking for similar properties to compare, and by similar, it doesn’t directly mean properties in the same location. Factors such as the age and size of the properties must be included in the criteria of properties that you are looking to compare.
Listing prices aren’t the same as sales prices.
Gus Dahleh suggests to determine the prices paid for the properties, and not what they have been listed for. Investors often make the mistake of comparing listing prices since it is easier. However, to get relevant and useful information, you will have to do some digging to get those prices.
Risk vs. Reward Asset Pricing Model
This asset pricing model helps you look at the big picture and evaluate risk vs. reward. Is taking on a particular property going to be the best use of your hard-earned investment money?
To answer this question, Gus Dahleh suggests considering the various investment vehicles available to you and how they relate to particular properties of interest. Think about lower-risk options, such as bonds or REITs, and how they compare to what you will make off of individual properties.
Using this asset pricing model, you simply need to calculate what you estimate the rental income to be for certain properties. This will help you determine what your buying price should be to maximize returns. You want your profits to be higher than if you were to invest in bonds or REITs. You have to determine the actual value of the property, whether it matches what the seller thinks its value is or not.
Consider whether or not a remodel or renovation might be a profitable investment for you as well. Spending upwards of ten grand for remodeling an individual room can pay huge dividends when approached correctly. You will have to evaluate the property to see if an investment of that nature is a good idea for you or not.
Cost Approach Model
When looking at a property you want to buy, consider how much it would be to rebuild the entire structure from bottom to top. This cost approach model provides you with valuable information that can help you determine the worth of a particular property. It is especially beneficial to use this model when dealing with select use properties. There might not be any direct comparisons in the area, so you have to think outside the box.
You first have to come up with the land value. Gus Dahleh says you can do this by comparing land prices in the area. You have to think about how the land would be used best if it were vacant. What would the construction costs then be? Come up with a price per square foot if there are similar buildings in the area. Determining the value of a home by what it would cost to build it right now can be a beneficial approach.
Consider the depreciation, if any, of the property. Properties depreciate according to their lifespan, but their values are also known to be on the rise over time. Are you familiar with the age-life method? You have to consider the lifespan of a property if you’re going to be the investor.
There are quite a few different methods for determining the value of properties as investments. The more data used, the better. You want to make well-informed decisions as you grow your real estate portfolio.
About Gus Dahleh
Gus Dahleh is a real estate entrepreneur who specializes in commercial real estate development with a primary focus on distressed assets. Since 2010, Dahleh has acquired over $50 million of commercial real estate assets and entered into long term leases with JP Morgan Chase Bank, AT&T, Walmart, Sam’s Club, and Cubesmart.
Gus Dahleh has also developed a niche in the cell antenna industry by selling lease revenue to publicly traded REITS which include American Tower and SBA Communications Corp.
Gus Dahleh began his financial markets career as an equity options trader at the Chicago Board of Options Exchange. Gus Dahleh has developed proven option strategies for the U.S. 30 Year Treasury Bond and Gold Futures based on seasonal and technical patterns. Gus Dahleh has a proven track record for providing direction on how to maximize the value of the commercial real estate and financial market investments.
For more information, follow Gus Dahleh through his Social Media links below or visit Gus-Dahleh.com for more information.