Do You Have the Right Character to be a Successful Investor?
It’s a fast pace world of buyers and sellers in the real estate world. Do you want to be a successful Investor?
Good! Then listen up!!
It can be quite intimidating if you are just starting out in real estate. It’s human nature to want to fit it. You want to be a successful investor like everyone else around you. I remember when I first went to networking events. I have to admit I was overwhelmed with the types and numbers of people that you interact with in this business. Luckily I had my partner Marc by my side, easing my overwhelm. I’m happy to say as my experience grew, my overwhelm faded!
Real estate has many moving parts. So when it comes to performing due diligence on a property you need to know what you are getting yourself into if you are buying a property. A successful investor must understand how to underwrite a property. It’s absolutely paramount. The last thing you want to do is overpay for a property or omit key costs that will eat into your profits
There are a multitude of elements you need to consider. To ensure you are have accurate data, you need to contact all the key players and review all the documentation you can get on the property to make sure you don’t leave anything out.
What if there is something you don’t understand? Do you just accept it and move on?
Simple answer……NO! ASK QUESTIONS!!
If you want to be a successful investor, then you need to know that it’s OK to not know everything!!
If there is anything that you don’t understand about the deal, ask for clarification.
If you don’t understand certain clause in the Letter of Interest or Purchase & Sale Agreement then get an explanation until you do.
If you don’t hear from key players, then keep contacting them until you get the necessary data to analyze the deal. Sometime it takes multiple tries to get the seller to provide you information you need to underwrite the property. That’s OK. They agreed to provide you those documents, so don’t let them off the hook. Keep asking until you get them.
Don’t take the seller’s word on costs. Yes he/she may have numbers in a spreadsheet that look amazing on paper, but if you don’t have evidence to back up those numbers, they mean diddly squat!
For example., call the city to get the current property tax amount and find out how they calculate it. (e.g. mill rate). This is so you can determine future costs once you take over the property. Call the current 3rd party contractors they have to see if they can provide you the same or better pricing for the same services when you take over. Call several other companies as well so you have a good idea of what the typical charges are for services in that area.
Don’t be one of those people who wants to “save face” by not asking questions because they don’t want to show they don’t understand something. Nobody knows absolutely everything so don’t be afraid to ask questions. You are only hurting yourself if you do.
Don’t lose your earnest money deposit because you let your EGO get in the way. It’s your responsibility to get all the pertinent details. You will have no one to blame but yourself for letting some things slide because you were too embarrassed or proud to ask questions.
To be a successful investor you need to thoroughly understand the process. That often means asking questions and digging deeper to get the right information to make the best educated decisions.
So if you take one things from today’s blog article is that…….When in doubt…ASK!
Want some more do’s and don’ts of real estate investing? Check out our two part blog series.
Remember, real estate doesn’t have to be complicated.
With Simple Acquisitions it’s smart and simple!