Smart Moves: How Real Estate Investors Pick Winners in Texas
Texas real estate is cooling down. Investors are no longer throwing money at any project. They are being picky. They want to know exactly why they should trust a sponsor with their cash.
Sponsors Must Prove Their Expertise
Shravan Parsi, the boss of American Ventures, says sponsors need to prove they know their stuff. Gone are the days when sponsors could say, "We like Austin," and expect investors to jump on board. Now, sponsors must show they understand the tiny details of the market.
- Who lives there?
- Who works there?
- What's being built?
- How will the area change?
Investors want specifics, not vague promises.
Clear Plans and Realistic Goals
Sponsors also need to be clear about what they plan to do with a property.
- Is it about making steady cash?
- Is it about fixing up a place to sell later?
- Or is it about holding onto land for the long haul?
Investors want to see a solid plan and a clear path to success.
Avoid Overly Optimistic Predictions
Parsi warns that sponsors should not make wild predictions about rent and expenses. Investors are wary of overly optimistic numbers. They want:
- Realistic estimates
- Honest talk about risks
If a deal only works out if everything goes perfectly, it's not a good deal.
Strong Property Management is Key
Finally, sponsors need to show they can manage properties well. In a market where rents aren't growing much, the little things matter.
- Keeping tenants happy
- Managing costs
- Providing good service
Investors are looking for teams that can deliver results, no matter the market conditions.
The Future of Texas Real Estate
Parsi believes the days of quick, easy profits are over. Sponsors who:
- Do their homework
- Know their markets
- Have a solid plan
...will be the ones investors choose.
