Ultimate Altus Real Estate Investing Guide for 2024

The abbreviation BRRRR is an illustration of a long-term investment plan — Buy, Rehab, Rent, Refinance, Repeat. When you plan to grow your investments, the BRRRR is an excellent strategy to employ. This strategy revolves around your ability to remove cash out when you refinance.

When you are done with fixing the investment property, its market value must be more than your complete acquisition and renovation expenses. The rental is refinanced based on the ARV and the balance, or equity, comes to you in cash. You employ that capital to get another rental and the process starts anew. You acquire more and more rental homes and constantly increase your lease revenues.

When an investor owns a substantial portfolio of real properties, it is wise to pay a property manager and establish a passive income source. Discover top Altus real estate managers by browsing our list.

Factors to Consider

Population Growth

The increase or decline of the population can tell you if that region is appealing to rental investors. When you see good population expansion, you can be sure that the community is drawing potential tenants to it. The city is desirable to companies and employees to situate, find a job, and raise families. Rising populations maintain a strong tenant pool that can handle rent raises and home purchasers who help keep your investment asset values high.

Property Taxes

Property taxes, just like insurance and upkeep costs, can differ from market to place and should be reviewed carefully when estimating potential profits. Investment assets located in excessive property tax areas will provide lower profits. High property taxes may predict an unreliable city where expenditures can continue to increase and must be treated as a warning.

Price to Rent Ratio

Price to rent ratio (p/r) is a market signal that informs you how much you can anticipate to demand as rent. If median real estate prices are steep and median rents are small — a high p/r, it will take longer for an investment to pay for itself and attain good returns. The less rent you can charge the higher the p/r, with a low p/r illustrating a stronger rent market.

Median Gross Rents

Median gross rents are an important sign of the strength of a rental market. Search for a steady expansion in median rents over time. You will not be able to realize your investment goals in a market where median gross rents are being reduced.

Median Population Age

Median population age in a dependable long-term investment environment should mirror the usual worker’s age. You will find this to be accurate in regions where workers are relocating. If working-age people are not coming into the area to take over from retiring workers, the median age will go up. That is a weak long-term economic prospect.

Employment Base Diversity

A diversified employment base is what a wise long-term rental property owner will hunt for. If the community’s workers, who are your renters, are hired by a varied number of companies, you will not lose all of your renters at the same time (as well as your property’s value), if a significant company in town goes bankrupt.

Unemployment Rate

High unemployment means smaller amount of tenants and an unreliable housing market. Jobless citizens cease being customers of yours and of other businesses, which produces a domino effect throughout the community. The remaining people may discover their own incomes cut. Current tenants may fall behind on their rent payments in these conditions.

Income Rates

Median household and per capita income levels show you if an adequate amount of preferred tenants dwell in that city. Your investment research will use rental fees and property appreciation, which will be determined by salary raise in the market.

Number of New Jobs Created

The dynamic economy that you are hunting for will be producing plenty of jobs on a constant basis. A market that adds jobs also increases the amount of people who participate in the housing market. This allows you to purchase additional rental real estate and backfill existing vacant units.

School Ratings

School rankings in the community will have a strong impact on the local property market. Employers that are considering relocating prefer good schools for their employees. Reliable tenants are a consequence of a steady job market. Homeowners who move to the community have a positive impact on property market worth. For long-term investing, search for highly accredited schools in a considered investment area.

Property Appreciation Rates

The basis of a long-term investment approach is to hold the investment property. You have to ensure that the chances of your real estate increasing in market worth in that area are promising. Small or dropping property appreciation rates will remove a location from your choices.

A furnished apartment where clients reside for shorter than 4 weeks is considered a short-term rental. The per-night rental prices are typically higher in short-term rentals than in long-term ones. With renters not staying long, short-term rental units have to be repaired and sanitized on a regular basis.

Short-term rentals serve clients travelling for work who are in the city for several nights, people who are relocating and want transient housing, and sightseers. Any property owner can transform their home into a short-term rental unit with the assistance provided by online home-sharing websites like VRBO and AirBnB. A convenient way to get into real estate investing is to rent a residential unit you already keep for short terms.

Short-term rental units require engaging with tenants more repeatedly than long-term ones. As a result, owners handle issues repeatedly. You might need to defend your legal exposure by hiring one of the top Altus investor friendly real estate law firms.

Factors to Consider

Short-Term Rental Income

You should determine the level of rental revenue you’re targeting based on your investment analysis. A quick look at a market’s present average short-term rental prices will tell you if that is the right location for you.

Median Property Prices

You also need to determine the amount you can spare to invest. To see if an area has potential for investment, study the median property prices. You can also make use of median values in targeted areas within the market to pick communities for investing.

Price Per Square Foot

Price per square foot can be impacted even by the look and layout of residential units. If you are analyzing similar types of real estate, like condos or separate single-family residences, the price per square foot is more reliable. It can be a quick method to compare multiple sub-markets or buildings.

Short-Term Rental Occupancy Rate

The necessity for more rentals in an area may be checked by studying the short-term rental occupancy level. A city that necessitates more rental properties will have a high occupancy level. If the rental occupancy levels are low, there is not enough demand in the market and you must search somewhere else.

Short-Term Rental Cash-on-Cash Return

To find out whether it’s a good idea to invest your cash in a specific rental unit or area, calculate the cash-on-cash return. Divide the Net Operating Income (NOI) by the total amount of cash invested. The resulting percentage is your cash-on-cash return. High cash-on-cash return means that you will regain your capital quicker and the purchase will be more profitable. Financed investments can reap better cash-on-cash returns because you’re using less of your own capital.

Average Short-Term Rental Capitalization (Cap) Rates

This metric compares rental property value to its yearly income. An investment property that has a high cap rate as well as charges typical market rents has a high market value. If investment properties in a market have low cap rates, they usually will cost more. The cap rate is computed by dividing the Net Operating Income (NOI) by the purchase price or market worth. The percentage you will obtain is the investment property’s cap rate.

Local Attractions

Short-term tenants are usually people who visit an area to attend a recurring major activity or visit places of interest. This includes top sporting events, kiddie sports contests, schools and universities, large auditoriums and arenas, festivals, and amusement parks. Notable vacation spots are found in mountain and coastal points, alongside waterways, and national or state parks.

To fix and flip a house, you have to get it for less than market price, make any required repairs and updates, then dispose of the asset for after-repair market worth. Your calculation of renovation spendings should be accurate, and you need to be capable of purchasing the home for less than market worth.

It is a must for you to understand what homes are selling for in the area. Look for a city that has a low average Days On Market (DOM) indicator. As a ”rehabber”, you will want to liquidate the upgraded property without delay so you can avoid upkeep spendings that will diminish your revenue.

To help distressed residence sellers locate you, enter your company in our catalogues of companies that buy houses for cash in Altus OK and real estate investors in Altus OK.

Additionally, look for property bird dogs in Altus OK. Experts discovered here will help you by quickly finding possibly lucrative ventures prior to the opportunities being marketed.

Factors to Consider

Median Home Price

Median real estate value data is a key indicator for evaluating a potential investment environment. Low median home values are a hint that there may be an inventory of real estate that can be acquired for less than market worth. This is a vital component of a lucrative fix and flip.

If your investigation shows a sharp decrease in home values, it may be a sign that you’ll discover real estate that meets the short sale requirements. Real estate investors who team with short sale facilitators in Altus OK receive continual notifications about possible investment properties. You will learn additional data regarding short sales in our article ⁠— What to Expect when Buying a Short Sale Home?.

Property Appreciation Rate

The shifts in real estate prices in a city are very important. You need an area where property values are regularly and continuously moving up. Accelerated property value growth could show a value bubble that is not reliable. When you’re purchasing and selling swiftly, an unstable market can harm your venture.

Average Renovation Costs

A careful analysis of the region’s building expenses will make a substantial difference in your location selection. The time it takes for acquiring permits and the municipality’s rules for a permit request will also influence your decision. If you have to show a stamped suite of plans, you’ll have to include architect’s fees in your costs.

Population Growth

Population increase figures allow you to take a look at housing demand in the community. If there are buyers for your repaired homes, the statistics will indicate a robust population growth.

Median Population Age

The median population age can additionally tell you if there are enough homebuyers in the location. The median age mustn’t be less or higher than the age of the regular worker. A high number of such people reflects a stable source of home purchasers. Aging individuals are preparing to downsize, or relocate into senior-citizen or retiree neighborhoods.

Unemployment Rate

When you see a community having a low unemployment rate, it is a strong indication of profitable investment prospects. An unemployment rate that is lower than the nation’s median is what you are looking for. When it is also less than the state average, that’s even better. If you don’t have a dynamic employment environment, a market can’t supply you with qualified home purchasers.

Income Rates

Median household and per capita income are a solid indicator of the scalability of the home-buying conditions in the community. The majority of people who buy residential real estate need a home mortgage loan. Their income will show the amount they can borrow and whether they can buy a property. You can determine based on the area’s median income if many people in the location can afford to buy your properties. Search for communities where wages are growing. When you want to augment the purchase price of your residential properties, you want to be certain that your clients’ salaries are also increasing.

Number of New Jobs Created

Understanding how many jobs are created per year in the community adds to your assurance in a community’s real estate market. A larger number of citizens acquire houses if their community’s economy is generating jobs. New jobs also attract workers migrating to the location from other places, which also strengthens the real estate market.

Hard Money Loan Rates

Investors who acquire, rehab, and resell investment real estate prefer to enlist hard money instead of traditional real estate financing. This enables investors to quickly pick up desirable assets. Find real estate hard money lenders in Altus OK and analyze their rates.

In case you are inexperienced with this financing vehicle, learn more by studying our article — How Does a Hard Money Loan Work in Real Estate?.

In real estate wholesaling, you locate a property that investors may consider a lucrative opportunity and sign a sale and purchase agreement to buy the property. When a real estate investor who needs the residential property is found, the contract is assigned to the buyer for a fee. The property is sold to the real estate investor, not the real estate wholesaler. You are selling the rights to the purchase contract, not the property itself.

Wholesaling relies on the involvement of a title insurance company that is experienced with assigning contracts and knows how to proceed with a double closing. Discover investor friendly title companies in Altus OK on our list.

Our complete guide to wholesaling can be read here: A-to-Z Guide to Property Wholesaling. When employing this investment plan, include your company in our directory of the best home wholesalers in Altus OK. This will help your potential investor purchasers locate and call you.

Factors to Consider

Median Home Prices

Median home values in the community will inform you if your preferred purchase price range is viable in that location. As real estate investors want investment properties that are on sale below market price, you will need to take note of reduced median purchase prices as an implied hint on the possible supply of residential real estate that you may buy for lower than market value.

A fast decline in housing values might be followed by a hefty number of ‘underwater’ properties that short sale investors search for. Short sale wholesalers can gain benefits using this strategy. However, it also presents a legal risk. Learn about this from our detailed article Can You Wholesale a Short Sale House?. When you are ready to start wholesaling, look through Altus top short sale real estate attorneys as well as Altus top-rated real estate foreclosure attorneys directories to locate the appropriate advisor.

Property Appreciation Rate

Median home market value movements clearly illustrate the housing value picture. Investors who plan to sell their properties anytime soon, like long-term rental investors, require a market where residential property purchase prices are going up. Both long- and short-term real estate investors will stay away from a community where housing purchase prices are going down.

Population Growth

Population growth statistics are a contributing factor that your prospective real estate investors will be familiar with. An increasing population will have to have more housing. This combines both leased and resale real estate. When an area is declining in population, it does not need more housing and real estate investors will not look there.

Median Population Age

A favorarble housing market for real estate investors is agile in all aspects, notably tenants, who turn into homeowners, who transition into more expensive real estate. This needs a strong, constant labor pool of individuals who are confident enough to shift up in the real estate market. That’s why the region’s median age needs to be the age of skilled workers in the workplace.

Income Rates

The median household and per capita income in a stable real estate investment market should be on the upswing. If renters’ and homebuyers’ salaries are going up, they can absorb surging lease rates and real estate prices. That will be critical to the property investors you are trying to work with.

Unemployment Rate

The community’s unemployment stats will be an important point to consider for any prospective wholesale property buyer. Overdue rent payments and default rates are higher in regions with high unemployment. Long-term real estate investors won’t buy a property in a city like that. High unemployment builds poverty that will keep people from buying a home. Short-term investors won’t risk being cornered with a property they cannot liquidate without delay.

Number of New Jobs Created

The number of new jobs appearing in the market completes a real estate investor’s evaluation of a prospective investment site. Job production signifies additional workers who have a need for a place to live. This is beneficial for both short-term and long-term real estate investors whom you depend on to take on your sale contracts.

Average Renovation Costs

Repair costs will be important to many real estate investors, as they typically buy bargain neglected houses to repair. The price, plus the expenses for renovation, must reach a sum that is less than the After Repair Value (ARV) of the home to allow for profitability. The cheaper it is to fix up a home, the more attractive the location is for your future purchase agreement buyers.

Mortgage note investing involves buying debt (mortgage note) from a mortgage holder at a discount. By doing so, the purchaser becomes the lender to the first lender’s client.

Performing notes are loans where the homeowner is regularly on time with their payments. Performing loans are a stable provider of passive income. Note investors also buy non-performing mortgage notes that the investors either rework to assist the client or foreclose on to get the property below market worth.

Eventually, you could accrue a number of mortgage note investments and not have the time to oversee the portfolio alone. At that point, you may want to employ our directory of Altus top residential mortgage servicers and reassign your notes as passive investments.

If you choose to follow this investment plan, you ought to place your business in our directory of the best real estate note buyers in Altus OK. Joining will make you more noticeable to lenders offering desirable possibilities to note buyers like you.

Factors to Consider

Foreclosure Rates

Note investors looking for valuable loans to buy will want to uncover low foreclosure rates in the market. Non-performing note investors can carefully make use of cities that have high foreclosure rates as well. The locale ought to be active enough so that note investors can foreclose and liquidate properties if necessary.

Foreclosure Laws

Mortgage note investors want to know the state’s laws regarding foreclosure before investing in mortgage notes. They will know if the law requires mortgages or Deeds of Trust. A mortgage dictates that you go to court for authority to start foreclosure. Investors do not have to have the judge’s agreement with a Deed of Trust.

Mortgage Interest Rates

Mortgage note investors inherit the interest rate of the mortgage loan notes that they acquire. Your investment profits will be affected by the interest rate. Mortgage interest rates are significant to both performing and non-performing note investors.

The mortgage rates set by traditional lending institutions are not the same everywhere. Loans offered by private lenders are priced differently and can be higher than conventional mortgage loans.

A mortgage note investor needs to know the private and conventional mortgage loan rates in their regions at any given time.

Demographics

A market’s demographics statistics help note investors to streamline their efforts and effectively use their resources. Note investors can interpret a great deal by estimating the size of the populace, how many citizens are working, how much they earn, and how old the people are.
Performing note buyers need clients who will pay as agreed, developing a repeating income source of loan payments.

The identical place may also be advantageous for non-performing mortgage note investors and their end-game plan. A resilient regional economy is prescribed if they are to find homebuyers for properties on which they have foreclosed.

Property Values

Lenders like to see as much equity in the collateral as possible. When the property value isn’t higher than the loan amount, and the mortgage lender has to foreclose, the property might not sell for enough to repay the lender. The combined effect of loan payments that lower the loan balance and yearly property value appreciation increases home equity.

Property Taxes

Usually borrowers pay real estate taxes to lenders in monthly portions along with their mortgage loan payments. This way, the mortgage lender makes sure that the property taxes are paid when due. The mortgage lender will need to compensate if the house payments cease or the investor risks tax liens on the property. Property tax liens leapfrog over any other liens.

If a municipality has a record of growing tax rates, the total home payments in that municipality are consistently growing. Homeowners who have a hard time affording their mortgage payments might fall farther behind and eventually default.

Real Estate Market Strength

Both performing and non-performing mortgage note buyers can do business in a strong real estate environment. The investors can be confident that, if necessary, a defaulted property can be unloaded for an amount that makes a profit.

Vibrant markets often offer opportunities for private investors to originate the initial loan themselves. For successful investors, this is a valuable part of their investment strategy.

A REIT, or Real Estate Investment Trust, is a business that invests in income-generating real estate. Before REITs appeared, real estate investing was considered too expensive for many citizens. The typical investor is able to come up with the money to invest in a REIT.

Shareholders in real estate investment trusts are totally passive investors. The exposure that the investors are assuming is diversified among a collection of investment real properties. Investors can unload their REIT shares anytime they need. However, REIT investors do not have the capability to select specific properties or markets. Their investment is confined to the properties selected by the REIT.

Real estate investment funds are essentially mutual funds concentrating on real estate companies, including REITs. Any actual real estate property is held by the real estate companies, not the fund. This is another method for passive investors to spread their portfolio with real estate avoiding the high startup expense or liability. Investment funds aren’t required to pay dividends like a REIT. The benefit to investors is generated by increase in the value of the stock.

You can choose a fund that specializes in a predetermined kind of real estate you’re knowledgeable about, but you don’t get to choose the location of each real estate investment. Your choice as an investor is to pick a fund that you rely on to handle your real estate investments.