Investing Tips and Tricks

[Christopher Freeman]

Whether you've done one deal or a thousand, chances are you've learned something new. Some of that learning is just getting up to speed on investor basics, but other bits of knowledge may be less well known or obvious. During your learning career, what are some tips and tricks you've picked up that you don't think are mainstream? Think broadly: this could range from finding great deals to working with people, financing to building a brand, and anything in between.

I'll start the ball rolling with two of mine:

1. Unless you're closing so many deals that you'd run into scheduling conflicts, a good working knowledge of how your lender determines the timing of your first mortgage payment can help you optimize the benefit from the rental proration (assuming the property is currently cash flowing). Example: On my first deal, I knew that closing on or after the eighth of the month would push my first payment into the second month out (close in JAN, payments start in MAR). Yes, you end up paying for this in the prorations and prepaids, but if the property is cash flowing then you get to carve out more longitudinal margin and build up a little extra cushion by collecting rents on the first of the subsequent month without the cash outflow of a PITI payment.

2. This may not be obscure knowledge, but it blew my mind when a kitchen retailer gave me this tip yesterday: When rehabbing a kitchen, don't replace the cabinet boxes unless they are in bad shape (or you're using a natural wood finish that you won't be able to color match). Instead, just repaint the boxes and replace your doors and hardware.

Alright, BP, let's hear your tips!