Successful entrepreneur Rob Rowsell is here to discus real estate deal acquisition from a 30 Thousand Foot view. Read on and watch along in order to examine the big picture of a rental property deal with Rob. You can never go wrong when you are learning from a proven multifamily investor and business coach.

What Does Real Estate Deal Acquisition from 30,000 Feet Look Like?

Networking To For The Right Real Estate Deal

In the first part of this deal flow talk, Rob lists a few of the real estate websites he frequents. Specifically, Loopnet and Crexi are favorites. He does not search these sites for the purpose of finding his preferred property deals. Rather, he uses them as a real estate networking tool. He builds relationships with the brokers who are selling properties in the specific locations that he is interested in. Rob requests that they put him on their email lists. Then, he offers to meet them for lunch to talk business when he is in their town. Eventually, these may just lead to the property deals that Rob likes to fill his buy box with.

Underwriting The Property Offer

Congratulations! You are now ready to make an offer for the property. Underwriting the property offer is the first step. This can be a very tedious and time consuming process. However, it is a necessary task for you to check off your list. Next, after you can make the offer to the seller, you can move on to the LOI (letter of intent) phase. This phase also includes the back and forth negotiation, which takes place between the real estate buyer and the seller.

Get excited, because after that, it will be time for the lawyers to get involved. Each party’s attorneys will work together in order to draft the PSA, or Purchase and Sale Agreement. Once the PSA is complete, then the real estate buyer will work with a Transaction Coordinator. The Transaction Coordinator is there in order to help open an Escrow account for the property. A Critical Dates Document will then be drawn up. This document outlines when each specific payment will be due for the property.

What Are Lawyers’ Duties In Real Estate Deal Acquisition?

Are you ready to close on your new (to you) rental property yet? Nope, not quite yet! Next, your lawyer will be tasked to do their financial due diligence. This will prove that the property’s value and income are 100% correct. It will also make sure that the billing accounts are all paid up. Nobody wants to buy a run down property that still owes a bundle in delinquent utility bills. Here is a pro tip from Rob: No income statement from a seller will match up 100%. As long at it is close, then you are good to go. Your broker and your attorney should have access to all the records that you requested in your spreadsheet.

The Importance Of Physical Inspections In Property Deals

Often, your chosen property management company will need to walk through the doors for a thorough inspection. The company will physically inspect everything with you before the sale. You should expect to pay them a reasonable fee for the walk through service. After all, you will get what you pay for. Make sure that you take the initiative to hire some third party specialists to inspect the roof, plumbing, and the HVAC. Many times, the person who is selling the property is unaware of the existing problems in these areas.

Rob usually likes to purchase the rental properties which require a few renovations. One of the most important parts of his standard real estate business plan includes setting a schedule for these much needed renovations to take place. Once the property renovations are through with, then it can command a much higher amount in rent payments. Make sure you inform the potential new tenants of the fact that these improvements will be worth the extra charges on their rent.

The Final Steps of Real Estate Deal Acquisition – Engage With Your Power Team and Investors

Does everything check out with your new real estate deal acquisition? Then you will need to make sure that you keep engaging regularly with your Power Team. This team will include your lawyers, your lender, and your property management company, as well as your insurance company. You should also preferably assemble a team of reliable investors who have pledged capital to your venture. Keep them in the loop through each and every step of the buying process. This is mission critical in order to ensure good faith with them.

Now, take over the property and celebrate! Wow, that real estate deal acquisition sure was a whole lot of work! There are plenty of tasks yet to come though, for you, new multifamily property investor. You should take a break and reward yourself now!