It seems like everyone in business is in a rush to do things as quickly as possible. If success doesn’t happen within the first few months your business may feel behind the eight ball. The reality is that growing a business takes time. It is quite rare that you will be flooded with deals upon entering the business. However getting off on the right track can propel you to work harder and reach new heights. As a new real estate investor one of your goals should be to get a deal under contract within your first 60 days in the business. While this certainly won’t happen without hard work and perseverance it is possible. Here are five steps to close your first deal in 60 days.
- Analyze Market. Before you can go out and start making offers you need to have an idea of what you are making offers on. One of the most important lessons to learn in real estate is that not every property makes a good investment. You need to find the right property in the right market and hope you can get it at the right price. The best way to understand what you are buying is by taking the time to analyze the market. Start by simply driving in your car and looking at homes for sale. Spend a few weekends at open houses getting a feel of the style and price range for the area. You should know which areas inside of a market are on the rise and which you may want to avoid. The more you know about your investing market the easier it will be to act when new listings come your way. If you don’t know everything about your market you may end up with a bad deal.
- Financing. How you plan on financing your purchases will impact how to search for properties. For starters very few, if any, real estate agents will show you any properties without either a proof of funds or prequalification letter in place. However you plan on financing is acceptable as long as you know and understand your financing options. If you plan on buying rehabs and quick flips hard money lending may be the best option for you. It gives you the ability to get your offer accepted without the burden of a mortgage contingency. Your loan is repaid after you sell the property and not in 30 years. If you are looking for a long term rental property traditional lender financing can be your best bet. With interest rates still near historically low levels you can lock into a low monthly payment for the life of the loan. Your financing options will vary based on the property and the specific situation. Before you can get too far you need to have all of your financing options in place.
- Lead Generation. Deals will not just fall on your lap. Even if you have the best real estate agent in the area you still need to look for deals. There are a handful of different ways to get your phone to ring. Inexpensive items such as reaching out to sellers on Craigslist or sticking a few bandit signs in the ground can be quite effective. If you have access to capital you can try a full blow direct mail campaign or target a few social media sites. However you plan on generating leads there are typically numerous options in every market. The more properties you look at and the more sellers you talk to the more comfortable the process will become. What you will find is that real estate investing is a numbers game in that the more deals you are a part of the more likely one will come your way. There is nothing wrong with dipping your toe in the waters with several different marketing options.
- Numbers. Looking for your first deal can be a very exciting time. However any fun you are having will quickly go away if your find yourself in a bad deals. The numbers should drive all of your investing decisions. You may personally love a property but if the numbers don’t work you need to wait for the next one. If you are interested in rehabs you need to know all of the expenses involved in the deal. This means any carrying costs, labor, repairs and everything else associated with the property. If you are looking for buy and hold property you should know average market rents as well as what monthly expenses you would be responsible for. Even the slightest change in numbers can completely change the perception of the deal.
- Make Offers. The final step in getting a deal accepted is making offers. As obvious as it may be you need to make offers if you plan on purchasing properties. Many new investors are afraid to make below asking price offers because they are afraid of what the seller may say. It is not enough to get your offer accepted you need to get it at a price that works for you. If your offer is not accepted and there is no counter offer you should move on to the next property. You never want to get caught up in a bidding war or move forward with an offer that you are not comfortable with. You and your real estate agent should always have a plan and never be afraid to make the right offer for you.
Following these five steps will help you get your first offer accepted within 60 days. At a minimum it should give you a blueprint for what you need to do to succeed in the world of real estate.
