Every piece of real estate you have ever seen, bought, owned, or drove by has a story attached to it. And I know for a fact that incredibly large profits and gobs of cash flow lie in you pulling out the story from the property. Here’s what I mean:
If you can ASK the exact questions (they’re below!) to the seller or agent and LISTEN well, you’ll put yourself in the position to:
- Reap bigger profits
- Wring out extra profit centers
- Negotiate like an “insider”
- Uncover the “elephants underneath the carpet” during due diligence
- Design a laser-sharp exit strategy
- Be able to predict the future…yeah!
- Be able to KNOW exactly what you’re buying
If you recall during your high school days, in English class you had to read and write short stories, remember? And short stories had the following pieces – characters, a setting, a plot, and a theme. If you paid attention in class you would have remembered!
Anyways, here are ten really good questions to ask to get to the nitty gritty details of a property before making an offer on it. These are not difficult questions to ask and get answers for, but they will tell you whole lot about the deal in a very short amount of time, most likely in a single phone call. This is standard MO for our team.
- What upside do you see in this investment?
- What type of deferred maintenance is there?
- What’s the current occupancy? And historically?
- Why is the owner selling?
- Is this an A, B, or C class property and location?
- What utilities do the tenants pay and owner pay?
- Are there any rent concessions given to the tenants?
- How long has it been on the market?
- What does the future of the area look like?
- What would a good offer “look like”?
After you get the answers to these questions, take a deep breath and see if this deal still makes sense to you. You’ll need to answer “YES” to these questions below:
- Does this deal still meet my investment objectives?
- Am I still excited about this deal?
- Do I have much better idea of what a good offer may look like now?
If you answered yes to all three, then it’s time to go to the next stage…making the offer…gulp!
If you answered “no” to one of them, then I’d suggest looking at ways to make it a sweeter deal for you or consider passing on the deal.
Whatever the case, by this time you’ll have enough info to write your own short story even if you slept during English class.