Owning one property is manageable for most investors. One problem, one unique solution. However, for true wealth, multiple units are the goal. To accomplish this without going crazy, or broke, you need systems for success.
Systems provide direction, a playbook, for what to do when you or your staff face a situation. Knowing what to do, how to do it and who to call when a crisis shows up, gives you the confidence to have a predictable outcome and freedom to focus on other matters like growth.
We spoke with Matt Faircloth from The Derosa Group about systems for success. Matt is an investor, flipper and multifamily syndicator. In order to grow, he developed systems that are written in pencil because he recognizes that if a better solution is recognized, he wants to use it.
System for Success in Property Acquisition:1) The first step is to do a Market Analysis. If it is your local market, it is easy to know the different areas of town and their reputation.
If you are not familiar with the area, you need to find the answers to the things you cannot change:
Additionally, answers to these questions will tell you if the area is on the upswing:
2) Evaluate the Property:
If the area checks out, it’s time to evaluate the property:
Do the numbers work? This is where you go line by line with the information available in the offer. (Click here to get a FREE DEAL WORKBOOK)
If the numbers work, it's time to do the physical inspection.
3) Physical inspection: The key to the inspection, don’t start inside the units. Start with the systems. What is lurking that is going to cost you money:
If you have a major expense and the seller is not willing to work on the price, move on.
Bonus: If you can, ask tenants you see what do they think of the property.
Then look in the units. What can you do to add value?
If everything looks good, you are ready to make an offer.
4) Make the offer
Now the clock is ticking.
5) Due Diligence: You have thirty days to confirm everything you believe to be true now.
Usually there will be something that comes up. This is your chance to address the seller to renegotiate if needed. If everything comes together, you will be the owner of a property.
Congratulations!6) Operation: Now you need systems that cover the day to day operation including:
7) Refinance: If you are in a syndicate, this is the time to pay your investors.
8) Repeat
For more information goto:
http://www.derosagroup.com/
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