Most Important Factors in starting out?
Have you heard the discussions bashing coaching and mentoring for Real Estate Investors? Yes, there are some bad apples (gurus) out there, and you should not have to mortgage your house to get into their programs, but there are some good coaches that do not charge enormous fees.
There have been many people that have scraped up enough money to pay an earnest fee on a property only to discover they did not calculate the numbers relating to the project correctly and they lost their money, or worst yet continued in the deal and lost even more money.
When analyzing a project, there are many factors to consider. The evaluation of the neighborhood, correct After Repair Value, reasonable Rehab Costs, different funding options, the cost of the borrowed money, the monthly carrying costs affiliated with a rehab project, correct insurance requirements, protections in the closing process, aligning yourself with a title company that fully understands how an investor buys and sells houses, deciding to sell or rent the completed project, and the legal requirements of either. Miss the mark on any of these, and you are placing yourself at great risk of losing much money.
Even if you can establish the correct numbers above, do you know the neighborhood? The level of rehab depends on the neighborhood. What are the demographics of the neighbors? It could be mainly young couples or single people as roommates, older citizens, or parents with kids. Each neighborhood would have specific patterns. Property values go up and down within a few streets. A local coach will know the ins and outs of the neighborhoods in your city
A local coach or mentor can help you properly structure your business to provide protection, develop your systems, and teach you how to evaluate the numbers of a deal. They will show you the steps that are needed throughout the entire process, helping you find funding and trusted service providers. They can share lessons learned, saving you costly mistakes. A good coach will be with you personally, giving you guidance, confidence, and protection.
