Questions to consider before investing in Real Estate.

[Fletcher Clardy]

Happy Wednesday to all!

I wanted to get some feedback on questions other Real Estate professionals consider before each potential investment. I know for my firm our biggest one is, "LOW BASIS". Is the asset valued under market? This provides room for error and unexpected value-add expenses that may arise.

I listed 10 questions to get the discussion started. Please comment if you consider any of the same questions and talk about your process in doing so. Also feel free to input more questions that are important to you in your decision making process.

#1. Do you consider yourself to be a passive investor or an active investor?

#2. Whats your typical investment timeline? Whats your exit strategy?

#3. Do you consider the tax benefits?

#4. What makes a particular investment attractive to you?

#5. How do you determine your capital stack? More debt or equity?

#6. How did you decide on your asset class?

#7. What due diligence do you conduct to determine market feasibility?

#8. What makes you confident that you will qualify for a loan? 

#9. Do you prepare a plan of action if we hit a downturn in the market?

#10. Have you ever considered crowd funding? If so, did it work?

Fletcher Clardy III, Clarity Equity Group, Kansas City, Missouri

[Guifre Mora]

@Fletcher Clardy great questions:

#1. Do you consider yourself to be a passive investor or an active investor? Active

#2. What's your typical investment timeline? What's your exit strategy? Long term, no exit as my investments are to accumulate wealth and retirement income in years to come.

#3. Do you consider the tax benefits? Yes, there are benefits to having RE investments. 

#4. What makes a particular investment attractive to you? cash on cash ROI. Let the rent pay the investment with low initial cash. Leverage equity to acquire more RE.

#5. How do you determine your capital stack? More debt or equity?

#6. How did you decide on your asset class? SFR is easy and low maintenance but Multifamily have more leverage as vacancy will still be able to cover costs and debt repayment.

#7. What due diligence do you conduct to determine market feasibility? Focus on 1 or 2 markets to know the history and see the growth opportunity. Near large metropolitan areas will eventually get closer to my market target.

#8. What makes you confident that you will qualify for a loan? I do my homework. Work backward know what's needed to qualify and keep all docs ready knowing what loan programs I qualify for.  

#9. Do you prepare a plan of action if we hit a downturn in the market? Keep a few unmortgage properties to dispose of if needed. Also as I acquire RE keep a higher % of back up funds.

#10. Have you ever considered crowdfunding? If so, did it work? Yes, I have done it and it has worked the contract and LLC is the key for it to be successful.