Posted by bashir on March 30, 2002 at 10:20:35:
Know what you’re going to do with the deal before you get involved in it, or you’ll increase your chances of it blowing up for lack of an exit strategy. If you’re going to flip it, do you have a buyers list? If you’re going to rehab and sell, do you have enough money(whether it be from a partner,yourself, or other businesses) to cover the cost of 6 months worth of holding the property. Back up cashflow is a must if you’re going to hold on to a property, if not then we’re just talking flips. You can tie a deal up and not know where the money will come from as long as it’s a good deal. If you(your deal) is profitable, then others want to make profits with you. People like to lend on good collateral. If what you want to do with the property is the exact opposite of what the numbers are telling you can happen, then there’s a chance there’s no deal. Look at your numbers first, if they tell you there’s a deal, then TIE IT UP! In short, IF your numbers look good TIE IT UP, and then find the money! Sellers with hot properties, and a high motivation to get rid of it, don’t wait on slow pokes!