Lessons from my First Assignment

One of the most important lessons of the Boots on the Ground (BOG) training is how to perform you first assignment, which can be viewed as an important part of learning how to invest in real estate with no money down, having gone through the experience of my first assignment it seemed important to summarize the major lessons to be learnt.

These lessons can be summarized as:

• Right property, right location
• Having good buyers
• Timing and the numbers

Right Property, Right Location

Much is taught with real estate about the first lesson about real estate being to do with the location of the property, well this has special significance with respect to investment properties and this is in respect of information available from comparables in the area. First clue how recent are the sales? if they are older than 3 months then this is the first clue that it could be a hard sale.

If there have not been recent sales in the area then this is a significant point as an investor. Given all other indicators are good (schooling, crime rates etc.) you should also be very concerned if the number of recent sales in the area have fallen.

Having Good Buyers

To complete an assignment you need a strong list of buyers and buyers that are looking precisely for the type of property that you are looking to put under contract.

It is easy to build a list of qualified buyers, but you will also find that they are each looking for different things - some seem to have unrealistic demands e.g. to show them properties under $15,000 while others are looking for easy to rent properties, the list is long and varied, and one even said to me that he was interested in apartment complexes rather than single family homes.

No matter ho good you buyers list you will have no success if the property you have to offer is not what they are looking for at the time it is available because you have to remember what they are looking for is a moving target.

Timing and the Numbers

Timing, as they say in show biz, is everything! This is as true for real estate deals as it is for treading the boards, if the deal is not right for your buyer then they will not bite.

The best advice here is to ensure that you run your numbers and that the deal offers value for both you and the buyer. You may think there is a margin for profit if they can make $25,000 on the deal but the buyer may not see it that way. When you run the numbers you must run them from the perspective of the buyer and not simply from your viewpoint.

You should also ask yourself if you have appraised the property properly, have you put down the right amount for renovations? Did you check inside the the furnace to ensure that all the connections are in place? Did you check that the fuse box is upto standard and the wires are connected?

It is easy to be complacent about your ability to sell this assignment, but for your first assignment you need to ensure there is plenty of room in the deal and be ready in-case you need to pull the plug.