The Real Estate Investing Life Cycle

Circular chart featuring the 6 phases of the real estate investing life cycle


Table Of Contents



If you want to get a comprehensive view of what making a real estate investment looks like - sit tight. We've got you covered.


Small stacks of coins next to home, signifying the investmnet process

Understanding The Cycle Helps You Avoid Wasted Resources

I believe that most real estate investors spend countless hours each week doing almost meaningless, non-revenue generating activities. 

Maybe they feel like they "need to keep busy" in order to be productive - but these steps are about working smarter - not harder - to become a better real estate investor.

The time you spend focused on "The Real Estate Investing Lifecycle" will yield much greater results as these 6 steps are all "revenue generating activities."

Let's take a look at them and talk about some of the tools you will need to execute each step. 

Step 1 - Generate Real Estate Leads

The first step in the Real Estate Investing Lifecycle is to generate leads. After all - no leads = no deals.

Leads are the lifeblood of a real estate investing business, much like raw ingredients are to a pizza shop owner.

In this step, you will create front end marketing funnels to attract motivated sellers and then go through the process of pre-qualifying them by gathering information from the seller or listing agent.

Some tools used in Step #1 of the Real Estate Investing Lifecycle: 

  • Leadflow: Helps investors find motivated seller leads with the click of a button
  • Direct Mail: Helps investors make a personal connection with the property owners, and address their pain points
  • Objections Script: Helps investors handle objections and turn negatives into strengths
  • CRM: Keep track of leads and deals


Step 2 - Analyzing The Deal

Investor using the deal analysis tool to confirm her property investment is worthwhile

The second step in the Real Estate Investing Lifecycle is to Analyze the Deal. This starts with pulling comparables, also known as comps, from the neighborhood. Then you meet with the seller to inspect the property and estimate repairs that are needed to bring the home to market ready condition.

After you've got comps and a repair estimate in hand, it's time for you to analyze the deal’s Estimated Net Profit and Return on Investment (ROI) using different buying and selling scenarios.

Some tools used in Step #2 of the Real Estate Investing Lifecycle: 


  • Comps Software: Find similar properties to your target property, and see how much they sold for.
  • Repair Estimator: Use the repair estimator to see how much your repairs will cost, and use your comping tool above to calculate the property's ARV (after repair value) to determine whether or not an investment makes sense.
  • Deal Analyzer: Run the potential deal through the Deal Analyzer to see whether or not it's a solid deal.
  • Paperless Office: An easy way to manage all inbound and outbound paperwork

Step 3 - Making The Offer

The third step in the Real Estate Investing Lifecycle?  Making the offer. This starts by calculating your Maximum Allowable Offer (MAO), or the maximum amount you are able to make while still making your desired profit.

A Key Point To Remember When Making An Offer

Think of your Maximum Allowable Offer as your hard stop. Since you've run comps and estimated repairs, you have a good idea of what your profit margin should be at this point. Throughout the negotiation process, keep your MAO in mind. It is your hard stop. You're not willing to go one dollar below that, because you know what your time and effort is worth. 

The Offer Package

When you make an offer, you'll give the property owner what's known as your offer package. It includes the following;


  • Purchase & Sales Agreement
  • Comparables Report
  • Repair Estimate
  • HUD-1
  • Proof of funds/funding


If the seller accepts your offer: great! Then it's off to start signing contracts. If not, you will adjust your offer and begin negotiating further with the seller or listing agent. 

Some tools used in Step #3 of the Real Estate Investing Lifecycle: 

  • Smooth Fax + Paperless Office: Allows you to handle all inbound and outbound paperwork, and ensures nothing gets lost in the shuffle.


Step 4 - Funding The Deal

Conceptual graphic showing bar chart trending up, signifying real estate funding

The fourth step in the Real Estate Investing Lifecycle is to fund the deal. You do this by lining up funding for the deal using private money, hard money, or more traditional methods like a bank or your own money.

Much of the work of funding the deal will have happened well in advance of you finding a property to put an offer on. Oftentimes, finding a private lender is done before the Real Estate Investment Cycle even gets rolling, which is why it's important to continually nurture those relationships with private lenders.

After you've arranged funding you will start, open, and close escrow with the title company/attorney and take ownership of the property.

If  you're doing a wholesale deal, you would find the buyer and assign the contract to them while working with your title company.

Some tools used in Step #4 of the Real Estate Investing Lifecycle: 

  • Private Lender Credibility Kit: Used by investors to prove their credibility and investor aptitude to private lenders. 
  • Paperless Office: To facilitate the paperwork flow

Step 5 - Rehab Property (Optional)

The fifth step of the Real Estate Investing Lifecycle is to Rehab the Property. Keep in mind that, if you're doing a wholesale deal, you usually won't undertake this step.

This step starts with  generating a Scope of Work (SOW) that details the work to be done on the property. You'll also start the process of finding and hiring contractors including getting the appropriate contracts signed. 

Next, you'll manage the rehab process if you are working with contractors, or begin rehabbing the property if you are doing the work yourself. 

Some tools used in Step #5 of the Real Estate Investing Lifecycle: 


  • Rehab Planner: Get a concrete estimate on how much your repairs will cost
  • Real Estate CRM: Keep detailed notes on all dealflows
  • Paperless Office + Smoothfax: Never let important information slip through the cracks
  • Expense Tracker: Realeflow's built-in Expense Tracker helps you understand your true costs, and your true profit margin.

Step 6 - Sell/Rent Property

Investor handing keys of short term rental property over to short-term tenant

The sixth and final step in the Real Estate Investing Lifecycle is to Sell or Rent the Property. This starts by generating back end marketing funnels to attract motivated buyers or renters. Oftentimes you can, and should, start this process as Step 5 (Rehab Property) nears completion, so you can limit the number of days the property is on the market. 

Once you find potential buyers, you will negotiate a final sales price with them and then open and close escrow through a title company or attorney, depending on your state.

If you are renting the property you will send potential renters through the application process and start the Property Management Lifecycle with the property. 

Some tools used in Step #6 of the Real Estate Investing Lifecycle: 


  • Paperless Office + Smoothfax: Ensure documents are accounted for in this last and critical step of the deal
  • Power Linking: Enables you to give other team members access to deal flows and paperwork
  • Real Estate CRM: Get reminders about due dates, followup reminders and more