How to Use Data to Make Investing Decisions

When it comes to real estate investing, there are few things that can help you to succeed as much as data. Data helps you to detach from your emotions so that you can see all the numbers clearly.

The numbers tell a story for every property. Unfortunately, these stories are not always pleasant. But, understanding the complete story behind a property can help you to drill down and understand – is this the right property? Is this the right market? Is this the right opportunity?

In order for a real estate investment to be ideal, all three of these things, the property, the market, and the opportunity must all be right.

How Does Blue Lake Capital Use Data to Make Investment Decisions?

Blue Lake Capital owns over 2,300 units across the U.S. in several different markets. We normally like deals that are 300+ units, between $60 million and $150 million. However, even though we have many units and are prepared to spend $100 million+ to acquire properties, we do not even consider properties unless the numbers make sense at least in the initial underwriting.

When it comes to using the data in the initial underwriting, there are some assumptions that you have to make before you buy anything. For example, you have to assume things about the rent increases, concessions, and vacancy.

Rent increases refers to how much you can push rents up year over year assuming you don’t make any renovations. In some markets, you will be able to push rents up 5 percent per year, and in others you will only be able to push them up 2 percent per year.