The market is the last couple years is very competitive as you already know it. Many times, where I thought I had a deal locked up to have it crumble before my eyes. Don’t ever stop prospecting for more deals. If you feel like you have something solid don’t stop prospecting to manage that project. Hire it out. Your main role as real estate investor is to continue being the entrepreneur and don’t stop prospecting for deals.
I tell this story to illustrate that it's absolutely CENTRAL to your business to have back-up plans in all aspects of the business.
I strongly recommend having two or three:
- Hard money brokers
- Appraisers for quick value assessments
- Rehab crew leaders
- HVAC techs
In fact, have two or three of any trade or profession lined up, ready to spring into action as a moment's notice. Sure, I have my favorites in each of these areas, but I am striving to have 3-deep hot back-ups in each. Thing happen. Life happens! Be prepared for it.
Don't stop there. Have back-ups when you rent or sell a property. A property isn't rented until the rent and deposit (or lease/option fee) is paid and the keys are in the hands of the new tenant. So, encourage back-ups until the money is in your hands (in cash).
I've had appointments set up to sign leases, and the potential tenants never show up, no call, and they quit answering their phone. This is despite being hot for the house an hour earlier! If you are in this business long, you will learn that people will disappoint you and they will fool you. So, establish policies and make one of them "it ain't rented until it's paid for!"
Encourage back-up offers to purchase. Deals fall through all the time! Take as many back-up offers as you can.
Having back-ups is a mental frame of mind that fits within being a big-picture thinker portion of the Mind of the Real Estate Investor. In addition, rearranging your core team is thinking big and long term. It's a constant process of improvement and adjustment. This approach is crucial to your business! Apply this principle and profit!
Gisela N Sanchez