The First Time Real Estate Investor: A Chronology — Part I
Posted @ 10:06 pm - Filed under Real Estate Investing, Purposeful Planning, Retirement, Communication, Goals, RE Investment Practice
Let’s take a peek at what a shiny new real estate investor faces when entering this market. We’ll use a composite Brown and Brown client made up of several clients who’ve come on board this year. They’re early 40’s with two kids. (She’s 39, sorry.) They make $150,000/year between them. They own a home with a loan at around 70% loan to value. The investment capital available to them is $125,000 not including their cash reserves. They credit is very good, with both scores in the mid-700’s.
First we need to hear them say they wanna be our clients. We don’t make a big deal about it, we just need to hear the words. Once spoken we shift into gear and our V-12 power plant begins its throaty hum. Ever heard a V-12 idling? It’s been described by some as a small airplane. Very cool.
Here’s the chronology
1. A frank discussion is had between the us and the client. How old are they? Salary? Savings? Other assets? Credit? Retirement goals? The list goes on for awhile. The agenda is to establish a Purposeful Plan based upon the answers to these questions. This Plan is the foundation for our first moves on our client’s behalf. It’s importance can’t be under valued.
2. We now have a Plan. The next time your phone rings it’s the lender you’ll be using. Sometimes you’ll have more than one, but usually one guy can get ‘er done. His job will be to get you qualified ahead of time so there’s no surprises on your side of the table. This usually takes only a day or two.
3. This is where the V-12 begins to go from throaty purr to gutty roar. Since we tell our clients exactly what to expect, they’re not surprised at the velocity of the process at this point. Contracts are written, proofed for errors, and emailed for signatures. Clients then print, scan, email them back. We’ve not yet gone electronic with sigs, but are strongly considering the move. This is also where the money begins movin’ from your bank to someone else’s. It’s rubber hits the road time. Slow down, take a breath, relax.
3-A. Inspections, work repair orders, re-inspections, happen at this point. Also, if the property is new, it makes sense to begin working with the property manager to find a tenant. Often tenants are found before escrow closes. This is a bonus, and shouldn’t be expected. Read that last sentence several times. 
4. This is where many with less experience tend to relax — a potentially fatal mistake. There have now been new players added to the mix, most of which are either not on your team, or worse, are apathetic to your agenda. The common denominator here is the almost total lack of control — yours and mine. It’s like watching six pans on a stove at one time. Be vigilant.
Tomorrow we’ll talk about what to expect as you approach closing. Lender problems. Insurance. Asset protection.
Meanwhile, back at BawldGuy Ranch, chase me down and get me on the phone so we can talk. Contact me via phone, email, the Contact BawldGuy button, smoke signals, tin cans, whatever. Every day is another day closer to your retirement. Will you be happy as it comes into focus?
Gotcha with that one, didn’t I?
This entry was posted on Tuesday, June 17th, 2008 at 10:06 pm and is filed under Real Estate Investing, Purposeful Planning, Retirement, Communication, Goals, RE Investment Practice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.