Virtual Investing for Real Estate Investors

This is the second installment in a series where Jayme and I began training real estate investors to spend LESS TIME and get MORE RESULTS by taking advantage of the technology and social networking available to real estate investors today.

Keep in mind that even if you’re not “computer savvy,” you can still use a computer to shave loads of time off of your real estate investment efforts.  In fact, you can research multiple properties from home in a fraction of the time it would take you to get dressed, get in your car, drive halfway across town to look at a property, get out…LOL!  I could go on, but I’m sure that you get the picture.  It only makes sense to see properties that you’ve already researched!

In our last article, we covered steps 1-4 of Buying Property Sight Unseen.  Click here to review Investing in Real Estate Sight Unseen

In steps 5-8, the idea is:

1. Write the offer contingent upon you doing your due-diligence, even if you haven’t seen the property, because…
2. You can’t steal in slow motion!

In other words, make the offer to tie-up the real estate, and THEN do extra homework on it!

Step 5:  Complete your due diligence on the property

This step is really nothing more than verifying the value of the real estate.  In this step, check out www.Rent-O-Meter.com for what other properties are renting for in the area.  You can use this information in a twofold manner:  A) compare the subject-property to other properties in the neighborhood and B) see if the property will cash-flow.

At this point, you should also double-check the price of comparable properties (same size, area, approx. same age, construction, etc.) by going back to www.Craigslist.com.

Step 6:  Determine Your Exit Strategy

I can write an entire  series around this subject (and at some point, probably will) – suffice it to say that in this step, you really only have two choices:  do you want to turn it for quick cash, or do you want to hang on to it for cash flow?

• Wholesale (Quick Cash)
• Rent (Cash Flow)
• Lease/Option (Quick Cash / Cash Flow)
• Owner Finance (Quick Cash / Cash Flow / Future Profit)
• Retail Buyer (Cash Out)

Step 7:  Negotiate offer/Lock up under contract

At this stage of the game, you’ve found the property, verified its value, and now you want to lock it up under contract.  You can do so by using one of the four techniques below.  Remember, while I’m not going to go into a lengthy discussion here of each of the techniques, I will in a future series.

1. Sales contract – in this case, you’re agreeing to buy the property, (pending your further due diligence) with then intention of holding on to it, or wholesaling it by flipping either the contract or flipping the property.
2. Option – with an option, you’re agreeing to buy the property (again, pending due diligence) at a future time with an agreed-upon price today.
3. Lease/Option – same thing, only between now and when you execute your Purchase, you’re agreeing to lease the property.  Great tool for medium-term control with all the profit and none of the risk.
4. Non-exclusive Option – This is an option that leaves the seller the chance to sell it to someone else, but he has to notify you first and give you the chance to perform.

That’s it for this installment – for more real estate investor training, come back tomorrow, when we’ll talk more about using Social Networking to find both funding and buyers for your property!