How Do You Get To Carnegie Hall?

     How do you get to Carnegie Hall? You know. PRACTICE. This is also the best way to become a better investor.

     Purchasing a property you are not quite sure what to do with to see if you can make some money is extremely risky. You might profit handsomely—you also might lose…a lot. Are there ways to practice with less risk? There are and many don’t cost anything. The next time you see a deal similar to something you have been considering investing in take some time and do some analysis. Is the price reasonable for the situation? Would the investment be profitable at that price? If it isn’t, what price would make the investment profitable? What if you had a lender who was willing to fund 80% of the deal? What if they were willing to fund the whole deal? What if the interest rate were 10%? What if it were 4%? What if there was no interest at all and your financial partner was willing to fund the deal for a share of the profit? What would be a reasonable share?

     What if the seller were willing to finance some of the purchase price? Would you be able to fund the rest? Would you be able to find another lender who would fund the rest? Who would that be? An individual or an institution? Have you checked to see what terms might be available? Might there be a way to make those terms more favorable?

      Have you made contact with other investors, lenders, buyers who could help with the analysis or the purchase? Do you know what types of deals your potential partners like to participate in? Could you structure a deal that would make it easier for your buyer to participate—could you offer terms that might be compelling for another investor? Who would you call to help analyze the deal? Who would you call to help complete the deal?

      Would you want to rehab the property? Would you want to rehab it yourself? If not, who would you want to do the rehab? Have you established a relationship with them? What would it cost? How long would it take? What holding costs would you incur? Who would be most likely to buy your rehabbed property? What finishes/features would they want?

     Would you like to hold the property? Would you like to rent it? Would you want someone else to manage it for you? What rent could you reasonably attain? What would the rent need to be for the property to be profitable? What if you don’t find a tenant right away? What reserves would you need? Could you accept a lower rent and still be profitable? Is the market strong enough to sell the property quickly if you had to? Who would you sell it to—another investor/landlord or an end buyer?

     Are you planning on calling homeowners to purchase their properties? Do you know what you will say when they answer the phone? Do you have a script? Have you considered the usual objections that arise? The unusual ones? Role playing can be a great way to get practice. Facebook live is becoming more prevalent. There are many investors, experienced and novice who are going live and letting you look over their shoulder. You can learn from all of them. Sometimes you might see a technique that resonates with you, that is effective, that you wish to emulate. Sometimes you will find a technique that doesn’t fit your style or seems ineffective. Can you modify it to better suit you? Should you try a different approach?

     Experiment, brainstorm, prepare for a scenario you don’t really expect. The more scenarios you think through the better you will be at recognizing an opportunity when it presents. Sometimes you attract the things you think about. Sometimes you attract the people who can help you accomplish the things you think about. Preparation might help you recognize a deal that others may not. Some of my favorite stories are of good deals that were passed over by other local investors. Why do you think I saw the opportunity that they didn’t? Could it be because I was looking for it and they weren’t?

     What are you doing right now? Why not analyze a property, a scenario? Practice. It just might prepare you for a great deal.