5 lessons I learned from closing my 2nd real estate deal!

My second rental property purchase is in the books! I closed on my first property on early June and closed on my second property in July!  My goal for the year is for 10 acquisitions, thanks to Grant Cardone's 10x rule. So essentially, I'm 20% there. While road to closing 10 deals will be a challenge, this second deal has only given me more motivation to reach my goal. Why? Because I was having some issues with closing on the mortgage. Essentially, part of my qualification on my first property, was having rental income from tenants that were in place but we're now vacant. As such my income ratios were not meeting underwriting requirements on the second mortgage. So for two weeks I marketed my property, ran promotions, and hustled to get the property rented. I had some leads and was able to get leases signed, but security deposits were missing. Since I work remotely, and sign leases electronically, there wasn't much I could do besides plead with the one tenantwho wasn't paying.. However, I kept in touch with my banker and let him know what was going on. Still wasn't enough, so I thought, and the closing was going to be postponed. Fast forward to the day the closing was supposed to take place: I got a surprise call from the banker saying the conditions were removed and we could close on the property! What happened? Well we still don't really know, but what do I attribute closing to? Persistence and perseverance to try to get the deal closed even if the odds looked slim. 

What I learned from this second deal:

1. Current laws require banks to scrutinize conventional mortgage applications. Review your bank statement and be prepared to explain ANY deposit to your accounts quickly after you are asked, and provide specific details.

2. If you have other rental properties, and they were considered as rental income in your previous mortgage applications, the bank will request the leases again. If the property is not rented, this could cause an issue with your debt to income ratios, and the like. Use this as motivation to work hard to get new tenants, even if you have to give some discounts.

3. Work with your banker and keep them continuously updated of your properties. I would tell the banker, I think I have another tenant, which motivated me to hustle and actually close on the tenant. Also, the baker saw how motivated I was and was willing to go the extra mile for me by speaking to his managers and supervisors to close on the loan.

4. Advertising and marketing is extremely important. Don't just think people will find your properties to rent. You need to market your properties to generate leads. I was generating so many leads that underwriting asked me how I was getting all these tenants interested in the property! The fact that they asked me this question gave me confidence that I was getting interest in the property and that they will rent.

5. Don't ever give up on the deal or yourself. The old adage, where there's a will there's a way couldn't have been more true here. The mortgage closing was not supposed to take place, but by not giving up, going to do a walk through on the closing date even though the closing was not supposed to take place, shows that going through the motions, never giving up, and staying committed to your goal will pay off.

For all new real estate investors, sign up for the Pro membership, run the numbers, and start making offers that make sense. If you're nervous, just ask the forums what they think of your deal, or send me a message and I'll be happy to review your calculation and share my opinion.

Here's to closing the next two deals, that are already under contract!

#LSHR