When you take the time to write something down, you never forget it. Writing down your real estate investment criteria means writing down your needs and wants on paper.
It means outlining what has to be in place in order for you to pull the trigger on your next residential investment property.
Having a written list of criteria can help you grow as an investor and can make it easier for you to land those really huge deals. If you to join the ranks of real estate investors, you might want to have formal written investment criteria set out for yourself.
Write Your Investment Criteria Down
Documenting your investment criteria allows you to see (in an instant) whether an investment opportunity fits into your future acquisition plan. This allows a property investor to quickly sort through potential opportunities and to pinpoint the right ones. If you haven’t yet outlined exactly what your criteria are for selecting an investment property, now’s the time to put pen to paper.
When developing your written criteria, you also need to consider what you DON”T want.
Have You Ever Considered…
Outline on paper the best real estate deal you’ve ever put together. What were the steps you took in order to acquire the asset? What were the major obstacles you had to overcome?
Were you prepared for the surprises? Or did you get blindsided?
Follow The Formula
What if you applied these same formula steps to every real estate deal you made? What kind of real estate investor would you become? You want to outline exactly what you do when you’re at your best, and add this to your written criteria.
Write Down Your Own Standards
Finally, and maybe most importantly, outline the standards by which you wish to live by as a real estate investor and entrepreneur. What are the ethical boundaries you’re not willing to cross? What do you want to stand for as a real estate investor and what sort of business do you want to have as an entrepreneur?
This may seem like abstract thinking at first, but this will help you in continuing to outline exactly the sort of investment opportunities you want to capitalize on in the future. The best real estate investors have a code of conduct, you should too.
It means outlining what you are looking for in a real estate opportunity. Having written criteria can help you grow as an investor and can make it easier for you to land the best real estate deals.
If you to join the ranks of real estate investors, you might want to have formal written investment criteria set out for yourself.
Putting your investment criteria in writing allows you to see at once whether possible investment opportunities do or do not fit your future plans.
This allows you to quickly sort through potential opportunities to pinpoint the right ones.
Writing down your investment criteria also hones your focus and ensures that you have an easier time finding the best possible deals.
Having written criteria also allows you to share your criteria with other real estate investors, so that you can learn from them.
If you haven’t yet outlined exactly what your criteria are for selecting an investment property, now’s the time to put pen to paper.
When developing your written criteria, consider when you do not want to make an investment.
What is the bottom line? Do you not want to make an investment at any time if you don’t understand it?
Do you want to never make investments that you cannot pay for if everything goes wrong?
Do you never want to make an investment where you cannot handle the worst-case scenario?
Determine your comfort boundaries and the level of risk you are willing to accept or not accept, and put this in writing.
Next, when developing your written investment criteria, consider what your ideal investment would be like.
What do you do to make sure that your investments are the best possible deals for you?
Do you do a certain amount of research using specific sources? If so, write this down.
Outline on paper the best real estate deal you ever put together. What were the steps you to that in to be an outstanding investor in that situation?
What if you applied the same steps to every real estate deal you made? Would you generate more success from other opportunities?
If so, outline exactly what you do when you are at your investment best, and add this to your written criteria.
This will help ensure that every deal will at least have the opportunity of becoming as successful as your best deal ever.
Write down your money criteria.
Where are you willing to go for financing?
How much capital are you willing to put at risk?
How comfortable do you feel taking risks with your money?
What levels of risk are you willing to take? How are you going to secure your deals?
Knowing how you will handle money is very important to you as an investor.
Finally, and maybe most importantly, outline the standards by which you wish to live as an investor.
What are the ethical boundaries you’re not willing to cross? What you want to stand for as an investor and what sort of person do you want to be as an investor?
This may seem abstract and very much up in the air, but it will help you outline exactly the sort of investment opportunities you want to capitalize on.
The best real estate investors have a code of conduct, so you should, too.
