Owning one property is manageable for most investors. One problem, one unique solution. However, for true wealth, multiple units are the goal. To accomplish this without going crazy, or broke, you need systems for success.
Systems provide direction, a playbook, for what to do when you or your staff face a situation. Knowing what to do, how to do it and who to call when a crisis shows up, gives you the confidence to have a predictable outcome and freedom to focus on other matters like growth.
We spoke with Matt Faircloth from The Derosa Group about systems for success. Matt is an investor, flipper and multifamily syndicator. In order to grow, he developed systems that are written in pencil because he recognizes that if a better solution is recognized, he wants to use it.
System for Success in Property Acquisition:
1) The first step is to do a Market Analysis. If it is your local market, it is easy to know the different areas of town and their reputation.
If you are not familiar with the area, you need to find the answers to the things you cannot change:
- Crime statistics: the type and frequency of crime committed in the neighborhood.
- Local area median income: Can your potential renters afford the rent you need to get?
- Affordability index: Are there enough potential residents that can afford the rents you want to charge?
- What are the market rents for similar units in the area?
Additionally, answers to these questions will tell you if the area is on the upswing:Continue Reading …