Sometimes investors get so excited to make a deal happen, they unintentionally look past red flags standing in their way. You need to be sure this is the right deal for you and your investment group before you move forward. Before you make an offer on any investment property, an in-depth analysis of the deal needs to be performed. You’ll need to consider the location, number of units, amenities, deferred maintenance and the overall condition of the building.
Leave no stone unturned! Cover everything from lease audits to bank reconciliation to breaker boxes. Obtain copies of all of the legal documents you can from the previous owner so you can have a good sense of what you’re stepping into. Not only will these things help you determine your profit margin, but doing your due diligence can protect your reputation. One bad deal can easily ruin a good reputation you have worked hard to build. Consider what my mom used to always say from Proverbs 22, “a good name is to be valued more than great riches.”
A good investment property requires excellent management. And one of the most important factors in choosing a management company is making sure they are local. You’ll want to make sure the company you choose is able to sufficiently handle any surprises that might pop up so you’re not left short-handed and your tenants are cared for. This usually means they are managing multiple deals in town and therefore have the amount of staff needed for sufficient availability. Make sure they have the back office support you need for your reporting requirements and don’t forget to make sure you know how you’ll get paid! Processing draws can be a very painful process with the wrong management company.
With any management company, as the owner, you will still be involved in the oversight of your property. For example, a lot of times investors must be asked to authorize certain repairs needed. Not only is it best for your tenants to have a locally based management company, but it’s best and easiest for you as an investor to ensure excellent communication with a local management company.
Don’t bite off more than you can chew! Investors who underwrite too aggressively make assumptions that hope for the best with a detachment from reality. The underwriting process makes or breaks the deal. To keep yourself grounded and set up well for success, here are the things you’ll want to make sure you do in the underwriting process:
As we’ve seen over the past couple years, you never know what the market is going to do. It’s important to keep a close eye on what’s happening in the market while you listen to what the Fed predicts.
It’s important to protect yourself with the right insurance. That means you’ll want to get a master policy. With a master policy, your property will be bundled with many other assets. Think about it like an insurance co-op. This will spread out the liability over numerous assets and greatly reduce your cost per door. With good insurance you will be protected from being held liable for any personal or property damages that occur at the building’s exterior or common areas within it. Talk to your broker about any additional coverage you might need to cover any gaps.
Your broker can help you choose the best insurance policy for you and your investment group on a particular property. When you have a trusting relationship with one broker, they are able to assess your unique needs and risks and develop a matching coverage plan. Quoting multiple brokers is not recommended unless you are not in that trusted relationship with one broker. Insurance brokers can trip one another up if they are both shopping your policy and it will frustrate them and won’t get you much of a comparison.
As the adage in real estate goes, you make your money when you buy it…so you have to buy them right! We love helping our investors buy them right or join us when we buy them right! To see more of my real estate content, check out my instagram here. I would love to connect with you and help you achieve success in your real estate journey!
By Mark Lemmons I August 17, 2022
In my last post, I revealed the first 4 tips on content marketing for real estate agents. You can find the full post here, but let’s do a brief review of what we covered:
Ready for the final 5 tips? Let’s dive in.
Whether you are creating content via YouTube, social media, or a blog, learning to write like a marketer will help you increase engagement. Here are some principles to keep in mind.
Address and agitate pain points. Talk about the problems or pain points your audience is experiencing related to real estate. This will grab attention and help you set your services up as the solution.
Lead with the benefit. Make it clear in the beginning of your content how the material is going to benefit your audience.
Use a hook. An attention hook grabs your audience and makes them want to engage with your content. Some classic ways to grab attention are sharing a surprising fact or statistic, opening a curiosity loop, or striking emotion. Check out this headline generator to improve your titles and headlines with better hooks.
Include a call to action (CTA). Call your audience to action. I typically like to do this at the end of the content, but this also can work effectively at the beginning. Some examples could be:
Use common words and short sentences. Use plain language that is easily understood and stay away from long, wordy sentences. Research shows that most adults read at a 7th or 8th grade level. Use this free online editing tool to make sure your captions and blogs are reader-friendly.
Use digits when possible. Numbers grab attention better than words do, so if you have the opportunity to use a digit, do it. For example, instead of writing “four bedrooms,” use “4 bedrooms.”
There are many technological tools at your disposal for creating and optimizing content. Here are the ones my team uses regularly to create content:
Canva. Have you ever wondered how people make nice graphics like the ones you see on Instagram? There are a few different tools you can use, but Canva is one of the best. There is a free version and paid version, both with templates you can use, like this:
You can change text, color, and font to match your brand and create a helpful piece of content for your audience.
Video. Although there is a place for nice graphics like the one above, anyone in the content space will tell you that nothing beats videos. It gets way more engagement and should be part of your strategy. You may not have the time and resources to create professional YouTube videos, but any real estate agent can create short videos or reels on Instagram and TikTok with an iPhone and Ring Light.
Ring Light. When you’re making videos, it’s helpful to use a Ring Light for good lighting. It will make your video look more polished with very little effort.
As you develop content, be sure to analyze your metrics and see what is working and what’s not. Every audience is different, and you want to cater to what your audience prefers. Track engagement on the various types of content you are publishing and adjust accordingly. Be sure to look at all analytics and not just the obvious ones. For example, on Instagram, don’t just look at the amount of likes and comments. Consider saves, shares, and reach. Be sure you set your Instagram account type to “creator” to access these metrics.
If you are just starting out creating content, it can feel scary. But the worst thing you can do is over-analyze your content to the point that you never put anything out there. Don’t be afraid to “fail.” It’s part of the learning process. The more you do it, the more comfortable it will become! If you are interested in a mentor that can help you build your real estate business, don’t hesitate to reach out to me.
Want help creating your email marketing strategy? Check out my video, 6 Fail-Proof Real Estate Email Strategies.