Monday December 18th 2017

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Guide to the Successful Investment

If you aren’t addressing the items that follow (Principal requirements, investor requirements, property identification, sales contract negotiation, etc), you may have trouble looming.
Principal (The  Investor Leading the Project)
•    The principal needs to build a resume of relevant experience and knowledge.  This should not be a barrier, but it should be a goal.
o    Invest in others projects;
o    Help support someone’s project;
o    Work in the industry;
o    Formal studies
•    Financials and background
o    Pull your credit,
o    Complete financial statements:
*    Real Estate Assets,
*    Securities,
*    Notes owed,
*    Notes owed to you,
*    Income from jobs or investments,
*    Personal Property,

*   Guarantees

o    Develop sources / liquidity (not required, but helpful),

o    Tax Records

•    Accredited status
•    Address
•    Phone numbers
•    Email address
•    If greater than 10% owner, financial statement
•    Understand their personal situation
•    Understand the condition of their balance sheet
•    Understand their investing goals

Identifying the Project

•    LoopNet
•    Local brokers
•    MLS

•    Craigslist

•    Develop deal flow by establishing contacts to forward prospective deals
•    Practice evaluating deals
•    Develop value add scenarios

Sales Contract to Closing
•    Develop detailed representations and warranties
•    Learn from the war stories of others (build your network)
•    Include a due diligence period
•    Have a detailed due diligence check list
•    Ensure you have qualified experts for the due diligence items
•    Stay on top of reports:
o    Survey (Alta and details from lender prospects)
o    Appraisal
o    Property Condition Report or Inspection Report
o    Phase I environmental
o    Title Search
o    UCC Lien Search
•    Prepare your market study including traffic analysis
•    Prepare your business plan
•    Prepare your financial plan
•    Prepare your project schedule
•    Complete improvement bids
•    Work from a Letter of Intent first
•    Work from a sales contract next
•    Have a detailed due diligence list for the seller to deliver
•    Understand your mandatory deal options and you optional items
•    Prepare a closing schedule
•    Prepare a closing day check list

Closing and Closing Activities
•    Complete your closing  day checklist
•    Check of on all reps and warranties
•    Remind the seller of post sale warranties
•    Save all documents with your lawyer from closing including:
o    Copies of leases,
o    Copies of resident files,
o    Photos of the property,
o    Photos of each building,
o    Photos of all amenities and common areas
•    Save most recent month and past year financials, rent rolls, aging summaries
•    Capture contacts for contractors and suppliers
•    Hire staff or select management company
Post Closing Operations

•    Contractor agreements,
•    Supplier agreements,
•    Customer Service needs
•    Website on
•    Advertising
•    Accounting and Finance
•    Tax
Exit, Refinancing, or Sale

•    Manage expenses for sale,
•    Manage improvements for sale,
•    Assure books are ready for sale,
•    Professional photos,
•    Capture surrounding market info including housing prices, comparative rents, etc.
•    Assure your rent roll is ready with the right residents in the right units.


While the above items cannot and should not be considered complete, the investor/principal can use these as a guide to assist preparing to invest through the exit.  Over the course of time, this document will be linked with other parts of the site to provide a simple organizational means for the member to locate information supportive to successful investing.

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