Step 6 - Zero In
This is where you have to keep your cool, but stay sharp and on-the-ready! Double-check that you have fully prepared. You've got your infrastructure in place. Money is ready to go. Now you have to do a seemingly unnoticeable, but very thorough inspection of the house. This is very similar to having a mechanic look over a car before you buy it, only you are keeping the information you find close to the vest. Why is that?
Remember what we said earlier about profit margins and great deals? We expect double-digit returns from our houses because we know what the up-front cost will be. Every savvy real estate investor know that you make your money on the buy. Novice investors will run scared at the first sight of an out-of-place floor tile or a cracked window pane. That's good for you. Those are easy fixes. They will also fail to notice the shoddy electric wiring, the makeshift pier supports in the crawl space, and the junkyard behind the fence in the back yard. Also good for you. Let them use up their cash buying the bad deals.
Don't misunderstand, sometimes it still makese sense to buy a house with more significant issues. One of our best deals was one in which we spent as much in repair cost as we did to buy the house. It all comes down to sharpening the pencil and coming up with a clear understanding of what your all-in expenses will be before you decide to make you offer.
This is where we feel TriStone Group can help the most. We evaluate properties for you so you don't have to do all of the hunting, inspecting, and cost estimating. Our privileged members have access to our Opportunity Analysis Sheets, that spell out in detail what we believe the total cost structure for a particular house will be. Take a look at a sample. We go a step further and give you the estimated rate of cash flow return and long term equity return as well.
We feel comfortable sharing this knowledge with you, because we've done the same things ourselves using our own investment dollars. It only makes sense to help you by sharing the same tools and evaluation techniques. Every house we own cash flows nicely. We can help to make sure yours do, too.