Private Money Bootcamp Handouts - Amazon S3...Real Estate Attorney-_____ ... They’re brand new 2)...
Transcript of Private Money Bootcamp Handouts - Amazon S3...Real Estate Attorney-_____ ... They’re brand new 2)...
BUSINESS MODEL
Objective- Get them comfortable with what you do and why you do it that way. Tell them thepurpose of your company.
What do you do? Rehab (do you have a niche?) ____________________________________________________________________________________________________________________________________________________________
What type of rehabs do you do?____________________________________________________________________________________________________________________________________________________________
What type of houses do you go after? Colonials, houses with at least 3 bedrooms?____________________________________________________________________________________________________________________________________________________________
Why do you do that?____________________________________________________________________________________________________________________________________________________________
Who is your ideal buyer?____________________________________________________________________________________________________________________________________________________________
What does your ideal buyer want?____________________________________________________________________________________________________________________________________________________________
Where do they want to live?____________________________________________________________________________________________________________________________________________________________
What price ranges are they willing to buy in?____________________________________________________________________________________________________________________________________________________________
Show them your systems (PROVIDE IRREFUTABLE SUPPORTING EVIDENCE)
Explain your social mission and your why. Explain company goals and
breakdown. FLIP CHART (IDEAL SELLER, IDEAL HOME, IDEAL BUYER, Price/Terms)
Private Money Bootcamp Handouts
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BUSINESS'MODEL/PLAN'GUIDELINES
!Marketing!to!find!deals!(explain!how!you!get!deals!with!equity)
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!How!you!calculate!repairs
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!How!do!you!determine!an!accurate!FMV
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How!you!come!up!with!the!purchase!price
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!Exit!strategies
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!Fund!the!deal
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!Project!Management
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!Market!to!sell!
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COMPANY BIOGRAPHY
Objective- Show private lender prospect that you have a solid team and how each team memberadds value and hedges risk.
Partners/Founders-____________________________________________________________________________________________________________________________________________________________
Board ofAdvisors-____________________________________________________________________________________________________________________________________________________________
Legal Teammates:
Real EstateAttorney-____________________________________________________________________________________________________________________________________________________________
Short SaleAttorney-____________________________________________________________________________________________________________________________________________________________
Business ContractAttorney-____________________________________________________________________________________________________________________________________________________________
ZoningAttorney-____________________________________________________________________________________________________________________________________________________________
InsuranceAgent-____________________________________________________________________________________________________________________________________________________________
Marketing Teammates: (if applicable)
Construction Teammates:
Contractor-____________________________________________________________________________________________________________________________________________________________
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Project Manager
____________________________________________________________________________________________________________________________________________________________
EnergyAuditor-____________________________________________________________________________________________________________________________________________________________
Real Estate Pros:
Realtor-____________________________________________________________________________________________________________________________________________________________
Home Inspector/Termite/Radon-____________________________________________________________________________________________________________________________________________________________
Architect-____________________________________________________________________________________________________________________________________________________________
Structural Engineer-____________________________________________________________________________________________________________________________________________________________
Mortgage Banker/Broker-____________________________________________________________________________________________________________________________________________________________
Stager-____________________________________________________________________________________________________________________________________________________________
Photographer-____________________________________________________________________________________________________________________________________________________________
Self Directed Retirement Rep-____________________________________________________________________________________________________________________________________________________________
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Coaches/Education-____________________________________________________________________________________________________________________________________________________________
Loan Modification Consultant-____________________________________________________________________________________________________________________________________________________________
Surveyor-____________________________________________________________________________________________________________________________________________________________
Bookkeeper-____________________________________________________________________________________________________________________________________________________________
Title company-____________________________________________________________________________________________________________________________________________________________
Credit Repair Consultant-____________________________________________________________________________________________________________________________________________________________
Environmental Contractors:
Oil Tank Sweeper/Tester/Clean-up-____________________________________________________________________________________________________________________________________________________________
Lead Based Paint Tester-____________________________________________________________________________________________________________________________________________________________
Asbestos Remover-____________________________________________________________________________________________________________________________________________________________
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FINDING PRIVATE LENDER PROSPECTS AT A NETWORKING EVENT
Objective- Find someone with the following criteria.
1) They’re brand new
2) They have money
Scenario- Meeting someone you don’t know at a networking event.
Step 1) Walk up and introduce yourself and ask them what their name is.
“Hello, my name is Jon Steingraber with Garden State Property Solutions. What’s your name?”
Step 2) Figure out their experience level.
“How long have you been in the business?
Step 3) Ask them what their goals are.
“So, how many deals are you planning on doing this year?”
Step 4) How much they’re looking to spend on a deal.
“What price points are you looking to buy houses in? $100k or $200k?
Step 5) Find out if they have money and how much.
First repeat what they say. “Four deals huh?”
“If I brought you a deal that made sense, how would you finance it?”
If they say their own money then BINGO! They have money!
If they say, I don’t know. Then move on!
Step 6) What’s in it for them?
“That’s awesome, I’ve been in the business for a while now and I’ve built up a pretty solid team.
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I remember when I first got started it was hard to find people that were investor friendly and nottoo many people were willing to open up their rolodex. I like to build mutually beneficialrelationships with people and I like to share my resources, how about I take you out to lunchsometime next week? What is your favorite restaurant, lunch is on me? “
Step 7) Collect contact information and find out something that you can talk about at lunch withthem to build rapport.
“Sounds good, do you have a business card on you?” (If they don’t have a business card haveblank cards already made up and fill it in and then give them a few so they can use them at thenetworking event.
“By the way what is your favorite sport? Who’s your team?”
Step 8) Fill in prospect profile sheet with information you just collected.
Now move on to the next person and do the exact same thing.
Get as many business cards of people that are new and are using their money as you can, these areyour prospects!!!
Notes:____________________________________________________________________________________________________________________________________________________________
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PHONE CONVERSATION WITH PROSPECT THAT YOU MET AT
NETWORKING EVENT
Objective: Qualify prospect as a potential private lender at a low interest rate
Step 1) Research and find a common interest. You can do this by using the following methods.
Research their favorite team and find out the last time they played, their record, players on theteam etc.
Google their name and see what comes up
Facebook them or look them up on LinkedIn and do some research
Basically, all you’re doing is finding something you can talk to them about to build rapport. Forexample, I once researched this lady named Helen. I looked her up on Facebook and saw that shewas born in the Canary Islands so I looked up Canary Islands on Wikipedia and I had somethingto talk to her about. When I got on the phone I said
Example-
Jon- “Hey Helen, this is Jon Steingraber we met at the networking event the other day. Do youremember me?
Helen- “Oh yeah hey Jon, how are you?
Jon- “I said great how are you?”
Helen- “Good, Good.”
Jon- “I love your accent, where are you from?”
Helen- “The Canary Islands”
Jon- “Isn’t that by ________ and the main source of revenue for the country is _______. ?
I’ve heard some beautiful things about the Canary Islands, so you speak fluent Spanish?
Helen- “Wow how do you know all that stuff?
Jon- “I study this stuff, in fact I lived in Uruguay in South America for four years and I speakfluent Spanish too!” (THIS IS THE COMMON INTEREST, WE BOTH SPEAK SPANISH)
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Helen- “That’s awesome so I can talk to you in Spanish!”
Jon- Chuckled “Yes you can. Hey Helen I want to see if we can schedule a lunch for nextweek I just have a couple questions. How has your money been doing over the past 12months?
Helen- “Not so good”
Jon- “What do you think would SATISFY you over the next 12 months? What do youthink like 5%? ...... (PAUSE)
Helen- “Yeah 5% is good 6% sounds better.
Jon- “If we talked about you making a safe 7% return and you learning a lot about real estateinvesting would that be something that interest you?
Helen- “Yes”
Jon- “Great so does Tuesday at 1pm work? We can go to your favorite restaurant on me?”
Helen- “That works”.
Other scenario: They say they want too high of an interest rate when you ask them what wouldsatisfy them.
Prostpect says- “No 5% is really low I’m looking to get 15% ROI”
You say- “So would you turn down an 8% return if it was very safe and you could learnhow to invest in real estate?”
They will typically say that they’re interested in talking about it. If they say no, 15% is my bottomline just lightly let them go and cancel your lunch like this.
“Wow, I love your attitude. I typically can build a mutually beneficial relationship with people thatare looking for lower returns but that’s out of my league. In order to be respectful of your time andmine I think it’s better that we don’t go out to lunch. If you ever need a resource you can feel freeto call me, this is my cell. I don’t mean to be disrespectful I just don’t like to waste time. I hopeyou can respect that.”
(Dig deep and see if they have money but they don’t know they do, equity, retirement money
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Step 1) Pick up the phone and call them.
Hey this is ____________ from the networking event from the other day. Do you remember me?
Step 2) Build rapport through your common interest.
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Step 3) Qualify them.
Hey ________ I want to see if we can schedule a lunch for next week I just have a couplequestions. How has your money been doing over the past 12 months?
Answer:_______
“What do you think would SATISFY you over the next 12 months? What do you thinklike 5%? ...... (PAUSE)
Answer:_______
Step 4) Schedule an appointment at their favorite restaurant. (make sure it’s not too noisy!)
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SCENARIOS
Where%else%can%you%use%these%questions?
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Practice%the%transition.
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IDEAL&PRIVATE&LENDER&EXERCISE
AGE:____________
GENDER:____________
INCOME:____________
GEOGRAPHIC&LOCATION:___________________
WHERE&DO&THEY&HANG&OUT:_____________________
WHAT&PROBLEMS&DO&THEY&HAVE?
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HOW&CAN&WE&SOLVE&THOSE&PROBLEMS?
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HOW&CAN&WE&GET&IN&FRONT&OF&THESE&PROSPECTS?
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Who&has&money&and&doesn’t&know&what&to&do&with&it?&
Inheritance,&Law&suit,&etc.&Who&has&access&to&these&people?
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HOW$TO$FIND$PRIVATE$LENDERS
Sphere$of$Influence:
1)___________________________
2)___________________________
3)___________________________
4)___________________________
5)___________________________
6)___________________________
7)___________________________
8)___________________________
9)___________________________
10)___________________________
Exercise$(Call$3$people$over$lunch$and$tomorrow$and$ask$these$questions)
Results:
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Court$Records:
TWO$COUNTIES$___________________$$$$$$$$$$$$$$$$____________________
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GOLDEN NUGGETS
Under Promise & Over Deliver
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Give 6 Months worth of interest
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Secure the funds before you do a deal
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SELF%DIRECTED+RETIREMENT+ACCOUNTS
What+is+an+MER?_____________________________________________________________________________________
Why+should+you+know+this?
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Traditional+Custodians+vs.+Passive+Custodians?
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Passive+Custodians:
Next+Generation+Trust
Notes:+_____________________________________________________________________________________
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PROPERTY'PACKET
Full Property Information (Address, Lot/Block, Beds/Ba, whatthe house will be when repaired.)
Listing Link if listed
Property Card/Taxes
Google Map w/ link to street view
Neighborhood Market Data
Pictures and Video of Property
Comparable's with ARV
Detailed Repair Sheet or Scope of Work
Contractors Quote even better- Broken down
Square Footage Sheet
Important details- Flood Zone, Oil Tank, Easements
Deal Analyzer (www.thedealcalculator.com)
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OBJECTION)HANDLING
!__________________________________________________________________________________
Answer:__________________________________________________________________________________________________________________________________________________________________________
2)!!__________________________________________________________________________________
Answer:__________________________________________________________________________________________________________________________________________________________________________
3)!!__________________________________________________________________________________
Answer:__________________________________________________________________________________________________________________________________________________________________________
4)!!__________________________________________________________________________________
Answer:__________________________________________________________________________________________________________________________________________________________________________
5)!!__________________________________________________________________________________
Answer:__________________________________________________________________________________________________________________________________________________________________________
6)!!__________________________________________________________________________________
Answer:__________________________________________________________________________________________________________________________________________________________________________
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PRESENTATION*CHECKLIST*FOR*PRIVATE*LENDER
Research(the(lender(as(much(as(possible(to(build(rapport(before(talking(to(them
Ask(them(how(their(investments(have(been(doing(over(the(past(12(months?
Ask(them(what(their(expectations(are(for(the(next(12(months(that(would(satisfy(them?
Go(over(company(biography
Go(over(business(plan((Explain(how(private(lenders(are(protected(through(funding(with(docs)
Show(them(previous(projects
Show(them(subject(property(if(you(have(one((full(details,(pics,(video,(property(packet)
Social(Mission
Explain(how(they’re(protected(with(the(equity(position((tangible(docs,(comps,(etc)
Explain*the*terms*for*this*project*(1st*lien/2nd*lien,*interest*rate,*months,*mentoring,*etc)
Ask(them(how(capitalized(they(are
Where(is(the(money(coming(from
How(quickly(they(can(fund
How(soon(can(they(fund(the(next(deal
Close(or(give(them(assignments(to(get(self(directed(account(set(up
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OUTSIDE(OF(THE(BOX(BLUE(OCEAN(IDEAS
Interest'Rates:__________________________________________________________________________________________________________________________________________________________________________
Social'Mission:
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Referrals:
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Bonus/Joint'Ventures:
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Other:
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Raise'their'interest'rate'by'.5%'every'time'they'lend'again
On'the'10th'home'they'lend'and'get'a'percentage'of'profits
Take'them'to'lunch'and'dinner'when'you'don’t'even'need'money
Get'to'know'them'(kids,'hobbies,'etc.)
Send'Thank'you'Greeting'Card'to'Private'Money'Lender
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FREQUENTLY ASKED QUESTIONS
What’s the minimum investment?The minimum investment is $100,000, however in isolated situations we have set upaccounts with investments as low as $50,000 but these lower investments would besecured by second lien positions.
Who handles all of the details?We will. It’s our job to get you proper documentation and protect your interest. All ofthis costs you nothing. The borrower pays all costs. If you make a $100,000 loan, yousend a check for $100,000 to the closing attorney and you get a mortgage for$100,000 on the subject property.At the end of the loan term or when we sell the house whichever is sooner you getpaid your investment plus interest.
How do I get paid?We will set up your account. The majority of our investors prefer to receive a one time,principle plus interest payment after the completion of a project. For accountingreasons, this is a preferred way for our company, as well.
What are the fees?No fees. All fees are incurred by us! That’s right! Get used to it!
Is this a long-term investment?Generally, your investment is tied to a specific project with a timeline ranging from 6 to12 months. We have lending programs for short term holds of six to eight months. Wealso have longer term holds of one year and longer. You can pick a term that suitsyour strategy. It’s your money and it’s your choice.
What if I need to liquidate?If you want out, a 90 day written notice is required, because we will need to replaceyour funds with another investor’s money. You really shouldn’t make mortgage loansif you feel you will liquidate this shortly, but the option is always available and we havebeen able to liquidate in as little as two weeks in some scenarios. Also, unlike with abank CD, there is no penalty for early withdrawal. Just call us, and we will handle allof the details.
Is my investment really as safe as it sounds?Yes! We always follow these common sense guidelines that we’ve talked about. Yourmoney will grow two, three, or even four times faster than your current investments andyou maintain control.
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Each one of our properties that we acquire is put through a rigorous financialevaluation in order to evaluate the profitability before the property is ever purchased.
For a detailed analysis of our process we can sit down and show you exactly how weanalyze a property and it’s comparables for you to be 100% comfortable. We makeour money when we buy so we’re adamant about getting the numbers right the firsttime around.
Remember that making loans is a business and should be treated like a business. Ifyou set up a simple system and let the professionals implement the system, your loanportfolio can be hassle free and produce staggering yields.
How do I use my IRA’s or pension plan?Making real estate loans is a widely accepted use for IRA’s and other RetirementPlans. Most people do not know that you can make private mortgage loans using thefunds which are already in your IRA’s and other retirement plans. Think of the powerof loaning out funds at high interest rates that are Tax free or Tax Deferred!
In order for you to use retirement accounts for loans they must first be administered bya third party custodian. One custodian we commonly work with is Equity TrustCompany. You can visit them on the web at www.trustetc.com or simply talk to us andwe’ll help you with the set up of your account. We also have other custodians that wecan share with you so you can investigate them.
After selecting your custodian, you simply send a transfer form to them and they’ll doall of the work for you. Once you’ve done that, you are ready to make private mortgageloans.
From there, you simply notify your custodian about the investment you are looking tomake and send the check for the gross amount of the loan. Even better, we can do allthe work for you and you just sign a few documents, sit back, relax and wait for yourmoney to grow tax free or deferred like grass on a spring morning.
What are my options if Garden State Property Solutions, LLC doesn’t pay?Actually, there are several options but first and foremost, please be aware that“Integrity” is an essential part of our business and we only make sound investmentdecisions. One of Garden State Property Solutions, LLC’s distinguishing features isthat we have never been late on a payment to a private lender or any other institutionfor that matter.
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However, to answer the question:
We could restructure the payment schedule on the note. For example, let’ssay we are behind on payments to you. Now Garden State PropertySolutions, LLC can and would like to keep the house, but they can’t come upwith enough money to bring you current in one lump sum. You could let uscontinue to make regular payments and make an extra payment on ourarrearage in addition, or you could simply add the arrearage to the principalbalance and extend the term of the loan. This means you would becollecting interest on interest for the entire remainder of the loan. There arealways ways to work it out if both sides are willing.
2) Have Garden State Property Solutions, LLC deed you the house. This is an opportunity foryou to get a house at a greatly discounted price. When this happens, youcan create tremendous profit by reselling the house.
3) If left with no other choice, you can simply foreclose. Foreclosure isn’t astime consuming and costly of a process as most people think.
It’s as simple as sending your note and mortgage to an attorney and saying‘foreclose’. All you have to do then is sit back and wait. Nine times out often, before foreclosure is complete, someone will be calling your attorney’soffice with a payoff letter, and your loan will get paid off. When this happens,you will collect all accrued interest, your principal balance, and all attorneys’fees, court costs, and all other expenses you have incurred in connectionwith your loan.
If you wind up with the house that doesn’t mean you have to keep it. It can be soldimmediately at a fair sale price and still produce a profit over and above the alreadyhigh yield on your loan. Due to the low LTV’s your investment is 100% secure.
Now, we’ve talked extensively about default and maybe we’ve provided moreinformation than is necessary, but we wanted to make sure you have all the facts andwe’ve answered any potential questions.
What kind of documents should I as the lender receive?Your closing package should contain the following:
A copy of the mortgage. The original will be recorded.An original Promissory Note.A hazard insurance endorsement naming you as mortgagee so
you’re protected on this specific property.Title Lenders PolicyProperty Analysis Packet ensuring the investment is safe
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MORE%QUESTIONS%AND%OBJECTIONS:
Let’s&joint&venture&instead.
What&if&there&is&another&real&estate&market&correction?
Answer:&&Ask&them&what&they&think&the&market&would&go&down&to?&Show&them&that&even&if&the&marketdrops&20%&they’re&still&covered&because&there&is&a&lot&of&profit&in&the&deal&and&you&were&conservative.&&&Putin&on&the&house&because&they’re&investing&in&the&house&and¬&necessarily&just&you.&.&
What&are&the&risks?
What&if&you&don’t&pay&or&I&have&to&end&up&foreclosing?
How&am&I&protected?
What&if&you&die?
What&if&house&burns&down?
What&if&their&is&an&insurance&claim&on&the&home?
What&if&something&is&wrong&with&title?
What&if&you&can’t&sell&it?
What&if&interest&rates&go&up?
How&am&I&going&to&know&you’re&using&my&money&for&the&transaction?
How&does&it&work&with&the&rehab&money?&Do&I&pay&in&waves?
This&house&is&a&piece&of&crap!
How&low&can&I&offer&as&far&as&interest&rate?
Can&I&get&10&people&to&lend&me&$10k&each?
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DISCLOSURE TEMPLATE FOR WEBSITE
Disclaimer*on*website:*This*is*not*an*offer*to*sell*securities.*Any*person,*entity,*or*organization*must*firstbe*qualified*by*the*company*and*read*all*of*the*offering*documents*and*attest*to*reading*and*fullyunderstanding*such*documents.*(Company*Name)**and*its*affiliates*are*not*licensed*securities*dealers*orbrokers*and*as*such,*do*not*hold*themselves*to*be.*This*website*should*be*construed*as*informationaland*not*as*an*advertisement*soliciting*for*any*particular*purpose.*All*securities*herein*discussed*have*notbeen*registered*or*approved*by*any*securities*regulatory*agency*in*accordance*with*the*securities*act*of1933*or*any*state*securities*laws.
DISCLOSURE*STATEMENT*
Please carefully consider (Company Name) investment objectives, risks, and associated costs orexpenses before investing. Real estate investments are not guaranteed or insured and pastperformance is not a guarantee of future performance. Please ask questions and ask for moreinformation before you consider any investment.
Determine Your Investment Strategy and Timeframe – Many factors should be considered beforeyou make any investment. Real estate investing requires a clear understanding of your risktolerance. You should also determine if you will require periodic investment returns or if you canwait to gain a potentially greater return on investment by waiting for a property to sell. Go into thisor any other investment with clarity and confidence, after asking questions and getting answers thatdeal with your personal investment goals.
Be Confident In Who You Work With – The old adage is true, trust but verify. Be sure that thecompany you entrust your real estate investment money to has a track record of success and livingup to its claims. Remember that past performance is not a guarantee of future success. Yourinvestment is not guaranteed and is not insured. A lack of past performance is also something to beconcerned about. Remember that any investment is made up of risks and returns.
You Are Buying a Business – Investing in real estate carries with it a great potential for creatingwealth and some risk factors. These include, but are not limited to, rising interest rates, increases inthe costs of rehabbing properties, a softening in the real estate market, the failure of renters to payrent on a timely basis, and other factors. Other risks, such as fire or title problems, can be insuredagainst. If you wish to exit your investment early, you should be aware that a replacement investorwill have to be found and the amount of time that will take may vary.
Invest with a Professional – The Company you work with should know what they are doing andlook under every rock! They should be hands-on and understand all the important aspects offinding, choosing, investing in, and selling real estate. Even the most professional company is runby humans and there may be mistakes made. Mistakes may increase costs and you should beprepared for this possibility. A track record of sound business judgment is something you shouldinsist upon when you invest.
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Failing to Have Adequate Insurance – Investment property brings liability. Adequate insurancecoverage is an absolute must! Be sure that the company you invest with obtains adequate insurancefor its investment properties.
Document Your Investment – Ask about what kind of documentation the company provides. Dothey offer a promissory note that details the investment you are making with them? Do they offeryou a first or second mortgage on a specific investment property? Do they file the transaction withthe appropriate real estate registry?
These steps do not guarantee a profit, but they are all important in operating a successful real estateinvestment business. It’s all part of documenting who owns what and what everyone’s rights andresponsibilities are. Investment property can be one of the most rewarding aspects of your financialportfolio.
Be certain to have all your ducks in a row before you invest. Do your homework and work withprofessionals upon whom you can rely.
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