Real Estate Investing in 2009 and beyond – Part 4 of 4

Wanted to change things up on this post, so the video is at the end.

As covered in Part 2 of 4 in this series the real way to ensure that your tenants are aligned with your equity interests is simply to create an equitable interest for the tenant in the property and associate that opportunity to participate with the actions and level of care you expect and desire. Some investors have taken this to the next level by actually becoming the “private lender” to the occupant who is elevated from “tenant” to “owner”. There are many other variations to these two strategies but, to lower risk with real estate investment, I hope that I have shown you that the key is to simply create value for the tenant by aligning their benefit for them with helping you to achieve your own goals.

Qualifying a tenant for this system is usually a little more complex than the simple “credit check” generally run by landlords and management companies. We suggest to our investors that they have the prospective tenant pay a little more for a complete credit, eviction, and criminal background check. There are many companies that offer these services, some for less than $125 per applicant.

Winning 100% of the time. Okay, so no one can really guarantee a 100% success rate, in real estate investing thought many do, they are simply playing the odds. However, there are a number of things that can be done to ensure that a portfolio will be profitable overall. Below is a list of things that your broker should be able to offer that will increase your success rate:

Should be able to demonstrate equity in the property and/or show a time line and process for the increased value of the property

Should be able to find a tenant or buyer before you buy or finance the investment property

Should be able to demonstrate an exit strategy that both; not reaching, and is still attractive enough to make sense

Should have the verbiage developed to protect your interest in both a lease and sale situation

What if:

Your tenant or borrower does not workout? – Your broker should be willing to list and sell/rent the property again for free

You fail to reach the value projected within the time projected – No one is in control of the future, but your broker should be willing to share in the short-fall by cutting his/her commission in proportion to your short-fall. (1% of commission due for 1% of increase projected, but not realized)

Shortly, I will be releasing a complete investment guide with step-by-step instructions for all of the strategies I have touched on in this series, as well as many other strategies for real estate investment success. To receive your copy please click on the “Contact Us” and send us the following note, “Please  tell me when investment system is ready”.