Investment Money? Don't Rush It.
So finally you have investment money from investors that is available for use. The investors actually did what they said they would do and you have the funds in the bank. What do you do now? Well if you have actually gotten this far then things are now to the point of serious. In foreclosure investing once you have access to the funds you now have access to do damage.
Remember that all investors do not make money. In fact many of the people you see down at auction will be living from credit card to credit card just trying to catch up from good deals gone bad. The risk in foreclosure auction is huge. It is our job as investors to reduce as much risk as possible prior to access of funds. Once we get our hands on money, we can lose it.
Here’s one thing almost all foreclosure investors can agree on. When first starting out its absolutely imperative to get a win early. You gotta make some money so when you take a loss it can be less painful. Here is a good example of a loss that as an investor you can’t do a damn thing about.
We hired a contractor on a project a lifetime ago and here’s how the story went. The guy was a fraud using a bad license. The problem for the investors is when you do the due diligence it shows as a legit license number. This guy ended up getting busted and has all kinds of legal problems because of it. However take all his legal problems and not any of it helps the fact that we had been victimized.
Work that was supposed to be done wasn’t. So we already paid for the work once right? Well get ready to pay for it again. Where does the money come from? In the end we all lose due to fraud. That still doesn’t help anything when calculating the bottom line. So remember that if you can’t spend it you can’t lose it. So it’s best to do as much research prior to getting funding. Once you’re funded you’re green for purchase.
If you have come to the point of being funded that doesn’t mean you’re at the point of having identified the best deal. I have waited weeks with funding prior to making a purchase. There is no point in rushing the process in trying to force a successful property. It’s better to be outbid, underfunded, and behind on research then to force a bad purchase.
Curious to read more? Come check out my personal blog.
Remember that all investors do not make money. In fact many of the people you see down at auction will be living from credit card to credit card just trying to catch up from good deals gone bad. The risk in foreclosure auction is huge. It is our job as investors to reduce as much risk as possible prior to access of funds. Once we get our hands on money, we can lose it.
Here’s one thing almost all foreclosure investors can agree on. When first starting out its absolutely imperative to get a win early. You gotta make some money so when you take a loss it can be less painful. Here is a good example of a loss that as an investor you can’t do a damn thing about.
We hired a contractor on a project a lifetime ago and here’s how the story went. The guy was a fraud using a bad license. The problem for the investors is when you do the due diligence it shows as a legit license number. This guy ended up getting busted and has all kinds of legal problems because of it. However take all his legal problems and not any of it helps the fact that we had been victimized.
Work that was supposed to be done wasn’t. So we already paid for the work once right? Well get ready to pay for it again. Where does the money come from? In the end we all lose due to fraud. That still doesn’t help anything when calculating the bottom line. So remember that if you can’t spend it you can’t lose it. So it’s best to do as much research prior to getting funding. Once you’re funded you’re green for purchase.
If you have come to the point of being funded that doesn’t mean you’re at the point of having identified the best deal. I have waited weeks with funding prior to making a purchase. There is no point in rushing the process in trying to force a successful property. It’s better to be outbid, underfunded, and behind on research then to force a bad purchase.
Curious to read more? Come check out my personal blog.
Comments (1)
good advice Jonathan. In our business money goes quick and if you are working with investors money its only best done with adequate reserves and security for the investor.
Kevin Kaczmarek, over 15 years ago