Your next investment property is an integral part of your portfolio, but many times it’s all too easy to get caught up in the excitement of a hot market that investors forget to take the time to do their due diligence before moving in on a deal. However, this practice can lead to not only wasted time and resources, but also money that could have instead been used on an actual lucrative deal.
In order to ensure that each property you invest in is setting you up for financial success, you should follow these 5 simple, but effective steps:
1. Know your goals & have a strategy
Before you can search for your next investment, you need to know what goal you’re striving to achieve next. Do you want to reach a specific returns threshold? Do you want to diversify your portfolio? Whatever you’re working towards, it’s important that you have it laid out before putting the work in to source properties. This will also inform the rest of the decisions you need to make – from acquisition to exit strategy.
Many investors benefit from developing a Buy Box, which can efficiently filter a large universe of investment opportunities and helps them stick to their strategy – which is especially important during a competitive acquisition landscape.
2. Look at multiple properties
The first step in the acquisition process is to find new properties to invest in, but you don’t want to stop at just one. It’s in an investor’s best interest to look at several different properties and analyze each one before deciding which one is worth your investment. You can use our Returns Analyzer to analyze properties in the field, so you’ll know in seconds whether you have a good deal on your hands.
You can read more about sourcing channels you may not have used yet in our Strategies to Acquire Real Estate Investment Properties blog post!
3. Get Pre-Approved for Financing
When working with lenders, the funding process can move extremely slow, often taking several weeks or months to close on a loan. In the current market, real estate investors don’t have the luxury to sit and wait in the hopes of getting competitively-priced financing. That’s why it’s critical to get your finances lined up early.
Our goal is make the financing process faster and more efficient, while providing better terms. Once you’re ready to move forward with a property, you can get pre-approved for financing right from the Backflip app.
*All Backflip applications are non-binding and will never initiate a credit review
4. Utilize your network
Many real estate entrepreneurs don’t like turning to other investors for help, for the fear of a deal being swiped out from under them. However, savvy investors know that many of them are more than willing to help those in their local network. They can be a great resource not just for sourcing new opportunities, but for support in growing your business.
As you continue to learn and take your businesses to the next level, utilizing your network for advice, guidance, or support is a great way to fast track that journey.
5. Be confident in your lending partner
Partnering with a trustworthy lender is another integral part of the investment process that shouldn’t be taken lightly. Our goal has always been to give our members the best terms for their deal, and continue to be your partner as you grow your portfolio.
Once you submit an application for a property, we’ll work with you to explore financing options that are best tailored to your investment strategy.