Zubair Ghias knows that investing in property can be very lucrative. This is why he began his own company to handle property investing. With 13 years in operation for the company, Zubair Ghias knows that there are some valuable hints that can be shared to potential real estate investors.
One such idea that Zubair Ghias knows is very important is top pay attention to debt service coverage ratios. Since commercial real estate lenders often use the debt service coverage ratio to help make a loan determination, it is important for the savvy investor to stay abreast of them as well. There is a pretty easy calculation ratio that they use. To calculate, you will want to divide the properties net operating income by its annual debt service. A commercial lender will want to see the coverage ratio over 1.25 or a net income that is at least 25% over the loan payments. This will help give a positive cash flow as well as leaving some margin of room for error.
Zubair Ghias also knows that it is very important to carefully consider whether it is wise to invest in rehab properties. Rehabbing a property can be fun and exciting however delays and cost overruns can make a good investment turn sour very quickly. The best way is to make sure you have a very strong understanding of the market in the area to help you budget and determine what it will take to make the property ready for the market.