“Learn to leverage your team.” – Patrick Riddle, S.Carolina Investor & Co-Founder of Private Money Blueprint

One of the biggest problems that I see especially in beginning investors is that they don’t have a defined and targeted niche. They’re interested in doing property analysis for single-family homes, multi-family property, commercial, mobile home and land.

Know Your Real Estate Niche

First, know what is the most important to you — generating quick cash or long-term wealth? If you go with generating quick cash, then you are going to be wholesaling or flipping.

If you already have some good cash reserve and you are looking to buy your property, then you are looking for long-term wealth-building, e.g., cashflow.

Second, know what type of properties you want to focus on. What type of properties do you feel most comfortable with now?

Maybe you’ve got started and studied some different types. When I got started, I chose single family homes.

Some people decide to go into multi-family property.

Do whatever you think is right for you but just decide what that specific type is and stick with it, become an expert at it. Then and only then you can venture out to other types of real estate.

Determine Your Wholesale Real Estate Buying Criteria

Many experts and investors’ buying criteria for properties is to buy them at sixty-five percent of value or below. You find the after-repair value, you minus repairs, you multiply by sixty-five percent and that is the most that many of your wholesale buyers will pay for the property.

That would determine what you should be able to make on wholesale deal.

You definitely want to use conservative numbers or your deal analyzing. If you are planning to buy, renovate and sell to a retail buyer, to be on the safe side, buy sixty-five percent of value or below and the more that you can pad yourself there, the better it is going to be for all parties involved and for your profit at the end of the day.

Let’s say that you have good cash reserve and you are just looking to buy a wholesome property. Maybe you are looking to build your cashflow and cashflow is the number one important thing for your buying homes. Then your buying criteria will be determined by the cashflow the property will generate.

Know Your Property Analysis Numbers

We’ve talked about two specific numbers because when you are looking at a property, you want to be able to find the after-repair value.

So after doing repairs that are needed, what is the property going to be worth?

It is good to be conservative with your numbers. And then the next number that you’ll want to be able to determine is the amount of renovation repairs that the property needs.

Now if you’re just getting started, you might not know how to analyze how much the property is worth after repairing and how much repairing is needed. That is okay. You do not have to be the expert.

The coolest thing about real estate investing is that you can leverage your team that you build around you.  They have the ability to verify all the numbers with the deals.

So when coming up with a conservative after-repair value, you would want to start networking with Realtors, appraisers or other real estate investors to get multiple opinions in value.

When I was starting, we had a Realtor that we passed the property by and he gave ideas. Now I have an inspector to go look at the properties. Whether determining value or determining repairs that are needed, it should be safe to know and feel good about the numbers that are put together.

Learn more about raising private money on your own check out Private Money on Demand.

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