The Questions You SHOULD Be Asking
A few days ago we got a question from Lamar asking, \u201cWhat questions should new investors be asking?\u201d We liked the question so much we decided to make an entire episode out of it. We conducted a survey online and got some interesting responses which I will share plus I will weigh in. Here\u2019s why this is important. If you are new, you need to make sure that your first project has the best chance of succeeding. In order to do that, you must engage in risk mitigation. And how do you do that? Ask questions. Ask a lot of them. Don\u2019t be afraid to be new. Everyone was at some point. The question may be obvious, even to you, but ask it if you don\u2019t know or are unsure. Today I\u2019m going to focus on questions that may not be so obvious to you, the newbie, that we all wish we WOULD have asked if we had known.
Plus we have news about the world of real estate coming up in just a few minutes.
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- My latest article in Forbes is out. bit.ly/findredeals.
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Local News
The biggest mall owner in the US \u2018can\u2019t guarantee\u2019 there won\u2019t be more retail wreckage this year
One of the most valuable malls in America is getting a makeover
https://www.cnbc.com/2019/04/30/westfields-garden-state-plaza-mall-is-getting-a-makeover.html
Rising rents for Millennials give rise to a new breed of lender
CIM Group has announced that its $5 billion development of apartments, offices, hotels and retail at The Gulch will be called Centennial Yards.
https://atlantaintownpaper.com/2019/05/real-estate-briefs-gulch-project-named-centennial-yards/
National News
Do you consider your home a great investment?
https://www.cnbc.com/2019/05/22/do-you-consider-your-home-a-great-investment-think-again.html
26 year old millionaire investor talks about the mistakes he made while buying homes
Home sales fell in April despite a big drop in mortgage rates
https://www.cnbc.com/2019/05/21/home-sales-fell-in-april-despite-a-big-drop-in-mortgage-rates.html
The most splendid housing bubbles in America
https://seekingalpha.com/article/4258900-splendid-housing-bubbles-america-april-update
International News
Real Estate firm names the top cities for risk-seeking investors
China-owned tower in New York City reportedly wouldn\u2019t let Amnesty International move in
Venture Capital flows between China and the US surpass direct investment for the first time
The Questions new investors ought to be asking:- From our friends:
- Bryan \u201cHow do I determine the finished value of my flip home before I begin repairs?
- Cindy \u201cCould my resources (time, money, skills, etc) produce a better outcome sooner if used elsewhere?\u201d
- Stewart \u201cHow do you quickly determine the cost of repairs to determine if it's a good deal or not? (I'm assuming there's other interest and there's little/no time for due diligence)\u201d
- Tom: \u201cWhy am I doing this? The answer has to be more than \u2018make money.\u2019\u201d
- Victoria: \u201cDo the numbers really work or am I working the numbers?\u201d
- Jeff: \u201cAm I prepared to lose the money I am investing? Never invest money you can't afford to lose.\u201d
- Damion: \u201cHow do you pull comps if you\u2019re not a realtor?\u201d
- Pat: \u201cIs there an app that includes both repairs AND comps?\u201d :)
- From Roger:
- What type of investment is this? (one time income, cash-flow, appreciation, speculation?)
- When should I expect to see returns?
- How liquid is my cash?
- How could this deal bite me in the fanny? In other words, What are the risks and how are they mitigated?
- What happens if things get sideways?
- What are the numbers I need to know and how can I know them?
- What\u2019s Plan B?
- Pricing alternative
- Alternative funding source?
- Alternative exit strategy?
- Backup Contractor?
- What is the pricing trend (rents or sales, depending on your exit plan)?
- For flips, what is the average DoM for this price range in this area?
- For rentals, what is the long-term outlook for this neighborhood? Which way is it heading? (the best hoods are those that are immune to value swings)
- For rentals, how are the schools?
- For AirBnB, are there any rumblings in local government that threaten this business model?
- If investing cash in someone else\u2019s deal
- What is that person\u2019s experience?
- What is that person\u2019s reputation?
- Do we have values alignment?
- Sandra, Kansas City, MO, \u201cHow do you get in and see all the properties around the country you and your investors are buying?\u201d
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Motivational Thoughts for the day- \u201cIt does not matter how slowly you go as long as you do not stop.\u201d
- - Confucius