If you want to know deeply about the real estate investment, the only good lesson would be buying investment property. Of course, when you start taking the first step, you see some difficulties in making a purchase deal. Definitely, you do not know all the steps of the deal. In this article, I will give an example on real-life step by step process.
I have been an investor since 2002. I have flipped properties, rented them out, and financed them. I have used all these tools and fond them all very helpful. My personal favorite is small and simple residential properties. Because I can manage time for writing articles for you by doing this.
I am here give an example of Mr. Aaron. He is in his 40s and now he wants to be Part-time buy and hold landlord. He lives in small-sized town and he also plans to invest there.
By going through this article, you will be able to know the complete investment saga. From the preparation to the marketing strategies, and to the closing deals of the purchase.
Preparation and The Planning Phase
Planning is the key to achieve your goal. Without planning it is like beating around the bushes. Mr. Aaron always believes in this key. He is doing a day job for a commercial construction company as a supervisor. His duty is to plan each construction project from start to end.
The first part of the plan was how to build wealth for the real estate investing business. He wants his financial independence. He works more and more in every free time, he gets. This made him financially strong. The steps he crossed to get to the financial peak are:
After passing all these stages he saved 50% of his annual income. Now, he has $60,000 cash ready to invest.
The Marketing Strategy Phase
Now Mr. Aaron has a good amount to invest. So, the next phase is, what would be the marketing strategies in the real estate investing business. Fix and flip properties, wholesale it, invest in notes, buy rental properties, or something beyond this.
After research, Mr. Aaron decided buying an investment property would be his strategy. He wanted the best use of his $60,000 and wanted an exponential growth in his income by using this amount. He started his deal by doing numeral BRRR strategy deals. After some purchases, he uses a debt rapid increase, to own some properties free within next the 12 years. Now, he is ready with a bid life-changing decision as he owns now a sufficient cash flow. He never gave up his job, so that he can save more from the job too.
Mr. Aaron is always determined and focused on his plans. He was busy with the family and job but always devoted to his real estate investing efforts. In order to earn the profit, he always sticks to the study and preparation for these next steps.
- Always study and research the essentials of the market.
- Clearly knows the property criteria.
- To get preapproved for the financing in the real estate market.
- How to prepare cash funds.
- How to create financial goals for cash funding.
- Creating a best-fit marketing plan to finalize the deal.
- Making offers.
- A thorough study on contracts and legalities.
The Closing Phase
When he knew all the above strategies after a lot of study and research. He now put the sale and purchase property under the contract. He never names his property under LLC while buying, he always buys under his own name. he was in contact with a private lender. He was also helping Aaronin making sound deals. And checking him throughout. When the offer gets accepted, he prepares the funds for closing the deal. Aaron self-directly pay IRA $50,000 loan and balance is the purchase price which is $10,000. He also paid for the repairs and closing cost. The total estimated cost would be $45,000. Full cash investment. After the closing, he is all set to make money.