How to Complete Your First Real Estate Deal in 30 Days
Author: Joshua Dorkin • URL: http://www.biggerpockets.com/September 7th, 2008 •
Getting deals done quickly is something that the gurus push and the newbie real estate investors eat up. Unfortunately, too many people rush into investing and start their investing unprepared.
With that in mind, I wanted to share some great feedback from some of our forum members on a topic discussing quick deals.
1) Do the deals with the best return on investment. You’ll grow fastest by getting the best return on your investment and that comes from the best deals.
2) time is money. A quick deal with a modest profit may be a better return on your time/investment that a deal that makes more money but takes a year to do.
3) time is money part 2, don’t be afraid to spend money to hire others so you can spend you time doing what you do best.
4) This is a team sport. Get people to help you, Don’t try to do this by yourself. Work with the best contractors, attorneys, RE agents etc that you can find.
To increase speed and efficiency, treat investing like a business. Talk to people and teach them how to bring you deals that meet your needs. Understand the value of using other peoples skills to support your business. Learn to lead. Read business and leadership books, not just REI books. Meet lots and lots of people. The more people you know that know that you are interested in x type of property, the more deals will fall in your lap. I know someone who had a mailman bring him a deal.
If you are interested in the mechanics of doing a deal like paperwork and such, talk to an attorney familiar with the contract and RE law in your area. Guru courses may have forms and such, but be careful using them without having your local attorney review them.
There is no canned formula for you to make 10,000/mo in cash flow in 3 months, you have to create the formula for yourself. What works for one person can’t work for another due to your motivation, your knowledge, your goals, your focus. You need to create your own path to success. Others can support your journey, but until you realize that there is no magic formula, you will be discouraged. Success in any goal is achieved by knowledge, luck and hard work, the less you have of one the more you need of the other 2, so you might as well focus on the 2 that you have control of.
There are multiple pieces to the real estate puzzle so, work it from all angles.
Basic process:
1. Locate & Negotiate. (As you listed.)
2. Purchase Contract.
3. Funding.
4. Closing.
5. Exit Strategy: Sale/Rent/Lease OptionThere are sub-categories in each step.
The order of the process can be altered to each deal. Mix and match. Repeat.Start a buyer’s list so that you have potential to sell the property quickly once you have closed on a good deal.
Another option is to partner with another investor to have funds available quickly for good deals.
Research online auctions for deals that are pennies on the dollar.
And, read and learn.
For more great advice on getting your real estate investing career going, read some of our starting out investing articles.
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Joshua Dorkin
Charles Feldman
Ted Karsch.
Richard Warren
I recently invested in the real estate and discovered how important role formal agreements and legalities play in it. I never expected it to be such a tedious task. Contracts seemed to me pretty simple at the first glance but the whole procedure got a bit complicated later on. After getting done with groundwork of financing, settling down with an area of investment, sending the letter of intent to the owner, etc I was all ready to put everything in a contract. Initially I thought I will be able to manage the whole procedure all by myself. But later I decided to take the help of some real estate consultant or attorney for it as it gets very difficult for first time buyers like us to deal with all the paperwork. . It’s very important that everything is covered without missing out on anything. As contract plays an important role in protecting huge amount valuables. What I have learnt from my experience is -Don’t rely on verbal agreements, make sure it’s written down and part of the contract.
You’re completely right about formal agreements. I especially emphasize having these when working with friends or family. These types of partnerships are usually the ones that require written agreements the most.
Sound, very realistic and yet encouraging guidance. Thank you for this post-very helpful!
Thanks for quoting me. This must be my fifteen minutes of fame.
Reiathreja, Contracts can be simple or can be complex but at least you read them. That is key, it amazes me how many people do a real estate deal and never read their contract. That is where the details are decided and those details can cost or gain you a lot of money.