Post # 4: In the beginning…
The amount of knowledge I have gained in such a short time is enormous, ranging from books I have read endlessly on real estate, business development and personal empowerment, participating in forums like the forum and the wonderful community built by Lior and Nirit the Cannons! BiggerPockets gave me a very broad view of things with the endless articles and books they have, I attended seminars and workshops, met with investors and investor mentors, in short everything possible to learn the subject… must note that to this day I do not stop learning and every day I try to learn something and challenge the Self re
Separate learning and actions
When I started doing market research, I focused on a number of markets and each time I felt that there was more and more to learn, more data to gather and that was never enough
In retrospect, it turns out I was in a so called condition Analysis Paralysis Where you are paralyzed from making a decision, luckily I came across this concept relatively quickly which allowed me to understand that I am in this vortex, I immediately decided to choose a certain market and run with it at this point I already knew I wanted to deal in real estate but I did not know where and in what constellation
I wanted a stable market, one that has investors and its volatility is not high, I chose Cleveland, Ohio
After focusing on certain areas of Cleveland, I built a work plan that included looking for professionals, defining an investment property selection criteria document (which is very helpful and helpful with any new agent / wholesaler) and estimating project execution times
The program is executed, countless phone calls and calls from noon to night, meetings with people in the country or through video calls, dozens of false promises, disappointments, endless transactions began to land in my email, go check them all, I started analyzing transactions and very quickly lost myself, must To produce a system, to be more efficient, forward to work, I built a virtual board online using Trello.com that allows to combine tasks and projects into a board that produces an accessible flow process that can be built and edited however you want according to your needs, arranged with flow charts for potential assets, test assets, tags already. Looks better, is less organized, less cluttered, no duplications, knows why I rejected deals, what I have already analyzed, studies the neighborhoods, indices and more data… A period of madness !!!
Then it happened: Entered two interesting super deals from the same wholesaler, one for Flip and one for Rental, both in the same area, starting to test them one by one according to the system I built and with the help of the carefully selected staff members, you sure ask how I chose them ?!
Through interviews I did, I worked with them like a robot with checklists of questions, but in the same breath I was nice, it was important to me to give a human feeling to the other side AP I conducted a certain pre-defined process, we are all human, need to think what is important to the other side And if / how it connects to what's important on my side… I hissed a lot, mostly based on intuitions and recommendations / dis-recommendations, until I reached two or three leading professionals from each field, I flew to the investment area, met with them in person, brought gifts from the country (they die on farms) ) We ate, drank together and made connections, saw projects, traveled in the investment area and I received a lot of important information that accompanies me to this day in knowing the area.
Back to transactions… The flip deal meets all the conditions I examined, I began to coordinate with the leading professionals, I received personal feedback and quotes from them, after all the field tests, cross-referencing the data and successful negotiations at a good time the first deal was signed !!
At the same time, looking at the rent-deal, here too works according to the system I built
Until the pressure to close the deal takes effect, it is a deal Subject To Very tempting, it is known that such transactions are quickly hijacked, so I turn to my team to access the property with a dead line almost impossible and indeed they had a hard time meeting the tight schedules… I move from the system and trust the owner of the management company I contacted to start working together, I asked him If he can go check out the proposed property, he was very nice to me and full of motivation that we will work together so I said why not… what also he lives very close to the property in question
The feedback I received from him was excellent, the owner of the management company visited the property and after that he explained to me what the repairs needed and how much he thinks there is an investment in repairs in the property which was minimal investment… and I did not notice at the time I left the system, I gave up professional advice. Demonstrated the ability to trust him in contrast to the regular staff and most importantly I did not confirm what I was told even enough I trusted him
Friday, two days before closing, the contract is already closed and everything is stitched to the deal
The main contractor is working on the flip deal, notifying me of the rate of progress, I asked him to be present atWalkthroughLast before closing, and also give a price estimate and prepare to enter "For easy renovation "Of the house that was closed in two days, he answered yes - in retrospect, this saved me A bad deal
After a few hours I get a phone call, it was the main contractor, he asks me if I transferred funds or closed something, I explained to him that there is a contract ready and the closing two days, I have not transferred funds yet (luckily) - he asked me "gently" Escape from this deal… Explained to me that the house stands like the Leaning Tower of Pisa, all the foundations are dismantled, the house is sunken, all the basement is wet with water, around the neighborhood houses are destined for demolition by the municipality in short in his words: "Do not put a healthy head in a sick bed "
After brief inquiries with the owner of the management company and the wholesaler, it turns out that important information was hidden from me and I, in my name, did not check well enough, trusted but did not make sure
To be more dramatic, it turns out that after the visit of the main contractor, who, by the way, argued with the sellers in the field about the nature of the house, called him and asked him for a sum of money to distort reality and let the deal move forward - he was much pleased and did not really agree
From that day, every potential investment property was first examined by my main contractor in the initial stages of the deal before all! Since then we are working with a full collaboration that proves itself every time! Once every two months, I visit the investment area, stay with him like a housewife, strengthen relationships, create new ones, research more deals and continue to study the latest market and developments to refine the search for assets and investment.
The conclusion friends: Build a good system and do not deviate from it, do not round corners and do what is necessary even at the cost of losing a deal from time to time. Even if you have to make quick decisions, you will still always stick to a certain order of actions, there are full of temptations in real estate and on the other hand countless opportunities, What needs to be yours will not pass you by!
And the flip deal you ask? This deal was very successful, it took a month and a half from the sale to finish the renovation project and another month and a half to find a buyer - in this deal I made about 20% profit on the money and of course I also came out with a lot of insights to improve the following deals and thanks to the team of believers I chose who proved themselves in the field
in the picture: Our first child who was a baby, taught us a lot about parenting, family, giving and what is important in life…
Legend Explanation for Professional Terms
Subject To - A type of transaction in which the mortgage payments on the property remain with the seller, while the buyer will be responsible for paying them, and has all the rights in the property. The buyer usually pays a small down payment to the seller and thus saves the buyer from paying full price on the property. Homeowners before foreclosure will usually offer to buy their property in this type of transaction מסוג
Walkthrough - This is the last visit to the property before signing the closing documents, usually a few days before the closing date. This allows to make sure nothing has changed at home since the visits you made during the check-in period
Closing - The last step in closing a real estate transaction, on this day all the closing documents are signed to transfer the property in the name of the buyer
System / System - The above term in real estate refers to the order of actions of processes that need to happen in order to produce a certain result known in advance, in our case these are the actions that need to be taken in order to purchase a real estate property for a successful investment according to our investment strategy.
Flip / Flip - A concise real estate investment strategy in buying, improving by renovating and selling a property for the purpose of profits from the differences in the purchase price and the selling price after offsetting the improvement expenses and other relevant factors
Rental - A real estate investment strategy that allows you to receive monthly rent from a property we have purchased, thereby generating passive income in a situation where the money invested makes money
Basement - It's actually the basement, the room where all the systems of the house are. You can turn the basement into more rooms in an action called Full Finished Basement
Real Estate ?? Real estate - properties that can not be moved, usually houses, apartments and land
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