Advice from my Lender?
Earning a living buying and selling real estate is very rewarding… but can also be risky business. This is a key reason why many people opt not to pursue real estate investing. It’s also a key reason why those that do, often seek out a key partner like Veristone. If you can leverage the learnings of those that have gone before you and follow in their footsteps, you can greatly reduce your exposure to many risks. You can also develop a repeatable plan for executing numerous deals. Veristone can help provide an understanding of what needs to be considered for every opportunity.
A few key items are listed here:
1. What are some considers other than price?
A lending partner like Veristone can work with you to review several factors, such as:
• Size and type of the property relative to the neighborhood
• Adverse influences, like a commercial area or busy street
• City services like schools and transit
2. Is my rehab plan complete?
Veristone will be happy to work with investors to review their plan for items such as:
•Doing research beforehand to determine which upgrades will add to the greatest value of the property. For example, kitchens with the latest appliances, granite counter tops and complementary cabinets are a big selling factor.
• Ironically, certain high priced upgrades may not yield a desirable ROI and could ultimately diminish your profitability.
• When you execute your rehab, ask yourself what is in your control to change. Make sure you model the updates in the home to what buyers are looking for and what will add the most value. This will help minimize risk and increase the prospect of your property being sold quickly.
3. How do I know it’s the right deal?
This may sound like a basic question, but it’s an important one. With real estate investments, it’s always good to plan for challenges that you hope won’t occur. Here again, working with Veristone as a partner will help.
• Veristone will not lend on deals which have too many risk factors, thus minimizing your chance of committing to a bad deal.
• Always target multiple deals and determine why they rank differently. Veristone can help with this too.
4. Do I have the right sales plan?
It is always wise to have contingency plans in place. For example, what are your plans to ensure the property sells? Veristone can help you develop this and other parts of your plan. They can provide tips to help make the property more desirable. It’s always a good idea to have contingency plans in place. Such as:
• Staging the house more attractively
• Renegotiating the asking price
• Strengthening marketing strategies
• Building a buyers list
5. Are my bases covered?
This goes hand-in-hand with planning for contingencies. In the event that the risk gets the better of the situation, it’s just as important to have safety nets in place. These can include insurance and other precautionary tools. Or determining a Plan B—such as securing permanent financing. Talk with your Veristone loan officer about these safety nets and how to ensure all your bases are covered.
It’s up to every investor to work hard, do their homework and make sound decisions. Ultimately, investors are the lead in any partnership, but as a trusted adviser, Veristone can make investing in real estate more rewarding than trying to go at it alone. Guidance and feedback can be as valuable as the dollars you invest. Take advantage of Veristone’s years of experience, give us a call today.