the property, but it will also help you determine if a certain city/ neighborhood could make a good rental investment or not.
DUE DILIGENCE & MAKING THE NUMBERS WORK
The most important thing you can do is to conduct your research about the structure, the land, and the surrounding areas. I like to call this your "due diligence" phase. This includes scheduling a home inspection, seeing if there are any new roads or construction planned to begin, ensuring there aren’t any liens on the property, looking at comparable properties, and researching anything else that could affect the value of the property you want to buy and renovate. This due diligence period is also where I have my team of contractors come through and give me quotes of all of the work I am wanting to do on the property. Also speak with a property manager if looking to rent out the property and make sure your the number you are estimating to get in monthly rent is right! If you’re just buying land, be sure to go over the deed with a fine-toothed comb. After you’ve completed your due diligence and accumulated sufficient information on all applicable factors, it’s time to decide whether this property is a wise investment or not. Sometimes, you may need to try to re-negotiate certain aspects of the contract to make the deal work for you with information you discovered during your due diligence period. That said, remember that even with the most detailed research, things can change and go wrong during the renovation period. Maybe the up-and-coming neighborhood takes an unexpected downward spiral, or maybe it up-and-comes more quickly than expected. Maybe when you rip up old flooring, you see the subfloor is damaged and you have to do a change order to your scope of work in order to replace the damaged subfloor. Unless you’re psychic, there’s just no way to predict what will happen, so making the most well-educated decision you can is
30
Powered by FlippingBook