You have two roles as a property investor: finding the deals and finding the money.
It’s crucial to remember that a deal is only a deal when the numbers work, so it’s important to not massage or manipulate the numbers in order to synthesise a deal. A deal either works, or it doesn’t – there’s no in-between. If you fake the figures in order to convince yourself of the validity of a deal, then you’re only going to be doing yourself a disservice in the long-run.
When looking at a potential property deal, you have to, paradoxically, begin with the end in mind. We need to look at what we have to work with, then calculate the amount we’re happy to invest in making this deal happen. Only then can we hope to ascertain the purchase price we’re willing to pay in order to make this deal happen.
We can realise this by considering the “Done Up Value” – what will the property be worth when we’ve finished the conversion? We also need to consider the strategy – are we converting to hold and rent out, or are we converting in order to sell?
Both of these strategies are explored in detail by Caroline Claydon in her free-to-attend “Property Wealth System” webinar, hosted live every week to help aspiring property investors – even those without starting capital – kick-start their property investment journey in 2021.
If our proposed strategy is to rent the property out, have we considered the values – the potential value we can achieve in our chosen area? If our strategy is to renovate with a view to selling on, what is the potential profit? Only by considering these factors can we properly decide upon the price we are willing to pay.
The cornerstone of this stage in property investment is that we must always seek to make money. We must make sure that at all stages, we are going to make money. This is the fundamental reason for being a property investor, and must be at the forefront of every decision. Do not be ashamed to to back away from a deal if the risks are too great.
When it comes to due diligence, it’s all about following a data-driven system that supplied a favourable outcome to the investor – to follow a proven system of results-based ventures that provide a success-drive outcome. As we go into bigger deals, the formula doesn’t change all that much: The costs may increase, as may the fees, but the central conceit remains the same.
Once you know what you’re doing, and the deals begin to net rich rewards for each venture, the opportunities for scale are immeasurable. By harnessing the lessons learned from smaller deals, we can then apply them to larger deals and increase our net profits, exponentially.
Always remember that while we may consider ourselves to be more of a “numbers” driven personality, this is nothing without action being taken. Conversely, if you are more of an action-driven personality, you must consider the number before engaging in a deal.
As ever, education in all matter related to property investment is advised and recommended. This post only provides a brief overview: If you’re keen to learn more and understand the right property investment strategy for your journey and goals, click below to sign up. The Property Wealth System webinar is free to attend, and a must-have for anyone looking to kick-start their journey to financial freedom in 2021 and beyond:
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