Acquiring great income properties can require great patience.
Sometimes the best property deals can take months to close. Transactions don’t always go smoothly. Yet, staying in the game, and seeing it through can deliver those much needed and valuable leaps in income, wealth, and financial freedom. So, how do you stay patient during the acquisition process, and navigate the process successfully?
Understand the Process This is especially important for new real estate investors. It can get frustrating, stressful, and discouraging fast, if you don’t know how the acquisition process works. Make sure you speak with any professionals involved in the deal i.e. real estate agents and attorneys. Or consult other real estate investors with experience in this type of deal and property type. Get clarity on the work flow and steps.
Create a Timeline for Follow Up
Once you know the steps in the process you can create a timeline for the transaction. You should have dates set out for the actions you eed to take, and for when you should receive updates from the various vendors involved. You don’t want to spend all day, every day, stressing out your team and actually dragging them down, when they could be pushing your deal forward. You do also need to hold them accountable and be sure they know you are expecting them to give your deal the attention it deserves. Depending on how far out your closing is set, that may be weekly, biweekly, or monthly updates from lenders, title companies, etc.
Create an Automated Follow Up Process
If you will be providing updates to various parties in the trnsaction, try to automate that as much as possible. That could be a simple checklist which you shoot out via email or update in the cloud using Google Drive. The less time you have to be on the phone or trying to arrange meetings the more time you can spend looking for new deals and enjoying the rewards of your investments.
There are going to be challenges. Most deals run into some type of challenge. The successful know to expect them, stay objective, and learn how to overcome them quickly. Common issues arise in appraisals, inspections, and title work. Having a great team is key. They should know what to look for to be proactive, and how to handle potential issues for you. Deeds and title insurance are a great example of this. Your title agent should know if there are quirks or ‘clouds’ on title which need to be addressed in order to get financing or insurance. They should be working on those right away, not telling you the day before closing, and causing a potential delay. If they aren’t doing this, find someone better.
Create a Layered Acquisition Process
One way to beat consistent delays and the wasted time and money that come with too many deals falling apart is to create a layered process. You don’t want too many deals that aren’t going to fly draggig down your pipeline. So, maybe you create a system where you do more due diligence upfront, use letters of intent before making hard offers and writing contracts, and then get your second round of due diligence done within hours of going to contract. Filter out the deals which just won’t work early, then be patient and stay the course with those you really want, and can make happen.