Gents,
Have an interview coming up for a real estate hedge fund investing in SFH. Was hoping to get some input on a few questions that could be asked.
- What factors do you view as most impactful to the valuation of RE assets?
- What type of market data are you looking for to offset risk in a given marketplace?
- How might new construction, falling economic data, or the equity values of publicly traded homebuilders impact the marketplace?
- What kind of metrics are used to measure the credit standards of a given MSA / neighborhood?
My guesses:
1. Cash flows (and, by extension, operating expenses, debt service requirements, etc.), cap rates in the area, recent comp sales, replacement costs?
2. For SFH, I'd think the main factors would be things like tenancy risk, delinquency risk, appreciation risk - just not sure what kind of market data would capture these.
3. Would think the effects on homeownership vs. rentership, unemployment, supply of housing vs demand would all be factors.
4. Not sure about this one.
Have a bunch of SB's burning a hole in my pocket so hopefully I get to give them out. Thanks in advance!
