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Realeflow

Your Guide to Personal & Financial Freedom Through Real Estate

The Real Estate Investing Lifecycle

Over the years I've come to realize that there are only so many levers you can pull to execute a successful (and profitable) real estate deal. There are 6 to be exact.  

6-Step-Real-Estate-Investing-Lifecycle

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

The first step in the Real Estate Investing Lifecycle is to Generate Leads. 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.

Here are the key tools used in this step of the Real Estate Investing Lifecycle: 

Step 2 - Analyze the Deal

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.

Here are the key tools used in this step of the Real Estate Investing Lifecycle: 

Step 3 - Make Offers

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

Next you'll make the offer to the seller or listing agent, backed by repair estimates and comps, also known as your offer package. If the seller accepts your offer, then you will start signing contracts. If not, you will adjust your offer and begin negotiating further with the seller or listing agent. 

Here are the key tools used in this step of the Real Estate Investing Lifecycle: 

  • Paperless Office
  • Short Sale Package Generator
  • Smoothfax

Step 4 - Fund the Deal

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 in Step 1: Generate Leads.

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

Here are the key tools used in this step of the Real Estate Investing Lifecycle: 

  • Private Lender Websites
  • Private Lender Credibility Kit
  • Private Lender Leadpipe Leads
  • Paperless Office

Step 5 - Rehab Property (Optional)

The fifth step of the Real Estate Investing Lifecycle is to Rehab the Property. This step is optional if you are doing a wholesale assignment of contract deal.

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

Here are the key tools used in this step of the Real Estate Investing Lifecycle: 

  • Rehab Planner
  • CRM
  • Paperless Office
  • Smoothfax
  • Expense Tracker

Step 6 - Sell/Rent Property

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. 

Here are the key tools used in this step of the Real Estate Investing Lifecycle: 

  • Paperless Office
  • Workflow Manager
  • Power Linking
  • Smoothfax
  • CRM

 

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