Why running your real estate as a business pays off

[Tony Castronovo]

I'm still on a bit of a high.  Had a great initial meeting with a bank this morning to discuss financing me for a significant purchase into the multi-family arena.  I started in real estate about 3 years ago and have a long way to go, but it was exciting to present myself and my small company.  Having a bank vice president validate that I am doing things right was really exciting.  I really don't think I would have impressed her so much if I didn't treat my real estate investing as a BUSINESS. 

For those that like the details:

1) I brought my tablet and presented my portfolio of 8 rental properties. I have a spreadsheet with a summary tab that clearly lays out my monthly/annual cash flows, portfolio loan balance, equity, etc. Each property has a separate detailed tab that includes all the specs and financials, including purchase price, ARV, rehab cost, loan balance, interest rate, taxes, P&I, expenses, and so on. It also includes a picture of the home. It showcases my properties very well....and she loved it!

2) I was able to rattle off the acquisition dates for every property, which seemed to impress her.  (I realized I need to add this to my spreadsheet, but the fact that I was intimate with the details said a lot).

3) I treated the meeting like an interview.  I asked good questions to show that I was engaged in the discussion.  I explained my background and experience (even if you don't have a decade or more of RE experience you can build a bank's confidence in you by sharing "relatable" experience in business), and I tried to build rapport by finding commonalities at a personal level.

4) I dressed for success!  My wife was laughing at me this morning when I was putting on my suit and tie.  But I believe how one presents himself (herself) can make a lasting impression.  I don't think if I was dressed in cargo shorts and a t-shirt if my presentation would have had the same impact.

While I have a long way to go, I will chalk this up as a first of hopefully many successes along my REI journey. Love this stuff!

[Alexander Felice]

You're a killer.

I've been in commercial lending a while and I'm never surprised by how poorly organized and unprepared so many businesses and their owners are.  You clearly care, know what your business is doing, and are focused intently on it. This far surpasses most business owners. The small stuff adds up.

Great work, great thread!