Can you help me streamline my system?

Question

Hi everyone.

I do not own any property just yet - I've had two deals under contract that have fallen through. Via the process that I have experienced, I have learned a great deal and I have attempted to put it down on paper to help streamline the purchase of property. The idea is that I want to be able to march down the list for any given deal so that I don't need to second guess what the next step is.  Please let me know where my holes are and if there is anything that should be tweaked. Thanks!

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Edit  - formatting inline is being finicky with me, I have a word document on my google drive here.

Account Closed · Answer

@Aaron Mikottis I think this is an ambitious start for a new investor. Going through the motions teach you a lot of things.  I remember coming up with something like this when I first started.  I remember putting some things like nearest school etc as well.  It looks like you are putting your market into consideration as well which i like ( i.e. average rents are of interest).

What were the reasons your first deals fell through?

Don't micromanage too much and just balance the numbers with what you are getting and now your potential needed repairs.  For example specifically to your list:  Say you have a 6 year old water heater.  That might mean you might need it swapped in 2 years, maybe it will make it 12 years.  Kitchen .  Will drywall or plaster make a big difference in your buy?  A lot of these items will get picked up on the inspection. So if you think your numbers are good going in strong, you have an expectation the property is decent but say your inspection finds 8k of needed repairs.  Then maybe the seller will give you that concession or work towards something you both agree on. The  most important thing you can do is to buy right. Its good to have an idea of the age of mechanicals etc and can use that as a negation point. Also it looks like you are trying to buy a 2 unit?  Be aware of the cap rate for rate of return reference but also know how it prices out in the market when you comp it against other properties that are similar ( which you indicated you are doing) .