What Makes a Good Real Estate Investment? Interview question.

Short answer: Price

Long answer: Depends on who your investors are and what their goal is

Some people think core deals yielding a levered return of 8-10% is a great real estate investment and yet others won't touch a deal unless they can get 20%+ returns on a development or value-add deal. Asset class is also a big factor since some people might never touch office or hospitality and only focus on industrial or multifamily properties so a 12% return on a tier 1 MSA multifamily property is more attractive than a 18% return on a tier 3 MSA office property. 

Assuming this is for equity. I would say the following:

1). Favourable risk-adjusted returns

2). Embedded value (i.e, immediate upside after just acquiring the property)

3). Good downside protection

4). Favourable macro and micro conditions (sector outlook, location demographics and trends, supply / demand levels etc)

Investment Analyst in RE - Comm

How would you answer this question in an interview? It's very broad, but curious what people think is most important to mention.

I'd say that if you're asking that question of an interview candidate, perhaps they should do more thinking about their investment strategy and less harassing of potential hires.

Seriously, that's such an open ended question that it can really only be answered by asking questions of your own.  From whose perspective are we answering?  What are my (as the investor) priorities?  Even within the same asset class and market, the answer can vary tremendously.  The only rational answer to this question is "one that succeeds in hitting it's investment parameters."

Well i think there are several factors that can contribute to a good real estate investment, including:

1. Location: A good location is a crucial factor in determining the value of a property. Properties in desirable locations tend to appreciate faster and have higher rental yields.

2. Property condition: A well-maintained property will generally attract higher rents and command a higher resale value.

3. Cash flow: Positive cash flow is an important consideration for any real estate investment. This means that the rental income generated from the property should be higher than the costs associated with owning and maintaining the property.

4. Market trends: Understanding market trends and keeping an eye on supply and demand is essential for successful real estate investment. Areas with high demand and low supply tend to be better for investment.

It's nothing more than an open ended question to offer the candidate an opportunity to discuss different considerations in real estate investing. It's similar to the general opener of "tell me a little bit about yourself." They just want to hear you talk about real estate. It also could be used as an opportunity to discuss your prior research into some other deals that the firm you are interviewing with has done - ie if they operate in the LIHTC, you could note how tax advantages can improve returns and such. 

A job interview should be a guided conversation, not an oral exam.