Why running your real estate as a business pays off
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!