Raising $2.8 Million and the Top 3 Questions I ask on Every Deal
I am under contract on a 200+ unit deal where I am raising $2.8 million of equity.
My experience has been, since I have bought and sold almost 1000 apartment units, that no two deals are the same. You can read how I quit my CPA gig to buy large apartment buildings by clicking here: I quit my CPA Job to buy Large Apartment Buildings
I equate large apartment buying to a VERY intense roller coaster ride.
Not the "kiddie" ride.
Not the ride that just goes up and down.
Not the ride that does a loop and done.
The type of ride I am speaking of is very fast paced, can be thrilling, many moving parts, has ups, downs, turns, can be gut wrenching, sometimes the ride goes backwards, sometimes the track ahead falls apart and you need to take or make a detour.
Sometimes the ride comes to an abrupt end and you feel empty inside with a thought of "that's it - this ride sucked and the seller info was crap what was I thinking”.
Or sometimes the last ride was a total buzz kill and you have thoughts of never wanting to do the ride again.
Trust me – I have had all of these emotional triggers and I am sure as my real estate investing career continues the ride will always have twists and turns.
As a CPA I really get into the numbers and ask lots of questions. Some sellers and brokers get annoyed, but hey it’s what I do to help me understand the good, bad and ugly of the deal.
Since the "ride" can take so many twists and turns from when you first get the seller info, to analyzing the numbers, to LOI stage, to negotiation, to due diligence, to loan process, to finally closing, I boil down my approach to 3 important questions I continually ask myself.
1.Why this deal NOW?
2.Why this market NOW?
3.Why is this the best opportunity for my investors NOW?
Admittedly there are other questions I ask when closing a deal, but these 3 questions I feel have helped me stay focused as information does change from when you first get the deal to when you finally close.
Since I continually ask these questions throughout the entire process, the questions help me reduce the amount of emotions I have about buying the deal.
WHY?? - I need to be able to answer each question based on actual facts and circumstances and not on what if's or lots of speculation.
At the end of the day, and raising $2.8 million from investors, I need to make sure I am thinking and looking at a particular deal with many different views and consider many different perspectives.
Curious to know, what are your 3 questions you ask yourself to help guide you through the “RIDE” of doing deals?