Most people don’t have a clue how important it is to inspect a property they are interested in buying before they buy it. If you wait until after you purchase a property to actually take a look at it you run the risk of discovering something that could completely wipe out your profits and end up losing you money on the deal. Something we definitely want to avoid.
If you want to be a successful investor with the ability to make large profits you must know what the repair costs of every property you look at will be. It doesn’t matter what you plan to do with the property, the repair costs will always factor in, whether you think you’re going to wholesale it, sell it retail, or rent it out.
This is why I bring a walkthrough inspection sheet to every property that I look at. You can get your copy by checking out my course Tricks of the Trade. Anything that needs to be addressed gets checked off on the inspection sheet and then I use that sheet to work with the contractors that will be doing the repairs. This keeps everyone accountable and on the same page for what needs to be done.
When doing the inspections, you need to give careful attention to the outside of the property as well as the inside. I take two walks around the exterior before I take a look at the interior of the property and I’m always asking myself a series of questions about what needs to be fixed.
You have to answer these questions for every property you look at because they all impact your ability to ultimately make a profit. And by documenting everything that needs to be addressed, you are also protecting yourself from being taken advantage of by unscrupulous contractors.
There is one key thing that I always want to hear when one of my coaching clients calls me up to talk about how to structure a deal they are considering. I want to hear why they are trying to buy that property and specifically what they plan to do with it if they close the deal.
The reason you need to make plans for a property before making an offer is that there are four types of houses: bank owned houses and foreclosure properties, houses you don’t personally want, houses that you can fix up and sell retail, and houses you’re going to hold long term as rental properties.
For the first type you’re probably going to have to come up with the cash or use an institution to fund your deal. You’re also going to have to factor in repair costs to make sure you can actually make a profit on the deal. Typically I don’t look for these kinds of deals because I don’t want to have to use an institution for funds. There are better ways to finance your deals.
For houses that you wouldn’t personally want to live in, they are perfect candidates to flip the purchase agreement to someone who does want it. The secret to being a good wholesaler is making sure you take care of the buyer and set them up to make a profit. You have to factor in all the costs involved to make sure the buyer can make money too, if you don’t you’re not going to be in the wholesaling business very long.
With houses you plan on selling retail, again, you must factor in repair costs and holding costs into the deal. If your numbers don’t work out, that property is not one that you want to buy.
The last type of property is calculated differently than the rest. You base what you can pay for a property on the rent you can get from it. It doesn’t matter what the seller wants for it, the house has to pay for itself. Paying more than what the house can generate is not how you and your family can get ahead.
For each property type, it’s vital to be realistic when calculating your costs and running the numbers. You can’t be out to lunch on your numbers or you’re going to run into major problems down the road. The most important part of the plan is calculating how much you can afford as a payment, since every rental property is a business unto itself. You have to get the price that will work for you, or the terms. If you can’t do that, you don’t buy that property.
Alan Cowgill is one of the leading experts in the private money space and he teaches people how and when to use private money to finance their real estate deals. Not everyone has access to a bank’s money, so it’s important to know how private individuals can help you fund your real estate deals.
In many ways, private money can be a real win/win/win situation for everyone involved. You can get your deal funded, the seller gets their property sold, and the lender can get a much better return on their money than they would with their existing portfolio.
The process can be very simple, and you don’t need to be a licensed mortgage professional in order to borrow private money. Basically, the private lender becomes your bank and imagine how that can change your life and the way they do business.
Private lenders aren’t in the business to loan money like money lenders, and they don’t ask for your credit report. They loan you the money and wait for a bigger check, trusting you to take care of things. When you raise money in this way there are also other ways to use the money as long as you make sure the lender is protected.
Every once in a while you will need money, and it’s always better to use someone else’s money. Private money can help you get deals that would otherwise be impossible but it’s key that the lender trusts you. When money is a phone call away, you can close real estate deals faster and that can give you a major edge over your competition.
There is one big difference between hard money and private money, hard money is where the lender sets the terms and private money is where you set the terms. Alan has a simple process that he uses to find new private money lenders where the big focus is in the follow up. 60% of your money will come from follow up. Alan shares his proven scripts that will put you miles ahead and can put millions of dollars into your bottom line.
Give Alan a call at 937-390-0816 or by email at firstname.lastname@example.org.