Napoleon Hill, the father of modem positive thinking, stated: “Whatever your mind can conceive and believe, it can achieve. ” This philosophy increases overall effectiveness in real estate investing. Planning and visualizing the outcome of a real estate acquisition and exit produces improved results.
If you are a parent, you know your children repeatedly ask ” why?” Over and over. This often leads to frustration. But this is a time to revert to those childish ways. During the exit or business planning process it is critical to ask “why?” The deeper I progress in the planning process the more I want to know. I continually ask questions that will determine a direction to develop specific results. I learned from the world-famous motivational speaker and coach Anthony Robbins. The better the questions you ask, the better answers and results you receive.
I analyze dozens of properties daily. In choosing a property and developing an exit plan I ask the following questions:
· What is the seller’s motivation for selling?
· How was the property price determined?
· What repairs are necessary to maximize revenue?
· What is necessary to increase re-sale profit for liquidation?
· Which expenses need to be eliminated or decreased to stabilize operations?
· What exterior / interior upgrades are necessary to raise rents and re-tenant?
· What systems need to be enhanced and implemented to impact operations?
· What mineral and air rights need to be evaluated?
· What else can this location be used for?
· Is there any vacant land available for expansion?
· What changes need to be made with current management or on-site staff?
I ask these questions to ensure that I think through the process from the beginning. Collect data to develop smart decisions and exit plans. This process becomes second nature over time. Think through the entire process from beginning to end. Once answers lead to a positive outcome the next step is to complete a thorough review of the offering. Conduct an initial site visit and complete the purchase agreement then proceed to closing. Ask one last question which is :” How do I leave margin for the next buyer?”