5 Productive Habits To Implement In Between Deals
By Paul Esajian on October 18, 2017
In a perfect world you would have a continuous flow of deals coming in just as your current ones are closing. Your business would be an efficient machine and you would never have any gaps between deals. As any experienced investor can tell you this is the exception rather than the rule. Even successful investors who have been in the business for years go through lulls from time to time. What makes them successful are the actions they take during these periods. Instead of complaining or taking their foot off the gas they use this time to evaluate where they are and what needs to be changed. When they do find a deal, they are quick to act and get the closing cycle going again. Every investor has slow periods but not everyone knows how to handle them. Here are five productive actions to take when you are in between deals.
- Study your market. As odd as it sounds having a brief gap between deals may not be the worst thing to happen to your business. It gives you the opportunity to take your foot off the gas and evaluate what has worked and what needs to be improved. You may have taken for granted what is going on in your primary investing market. If you haven’t evaluated your market in some time, there is a good chance you are using outdated information. This could be a partial reason why your business is currently stuck in neutral. Use this time to get back out and see what is going on. Drive around your market and look at new listings and see if there are any noticeable changes you may have missed. Reading MLS listings is fine, but nothing can replace putting actual eyeballs on a property or on a market. Use your downtime to reacclimate yourself with your market and make it a point to know everything about it.
- Review current listings/recent sales. Getting your eyes on properties in the market is the best way to see what is going on but not the only method. You should also use this time to review current active listings as well as any properties that have recently sold. When you are busy it is easy to quickly review the bottom line and move on. However, in some cases the bottom line doesn’t tell the full story. In some transactions there may be extenuating circumstances such as excessive repairs, foreclosure or short sale that impact the price. Without reading the listing description you may not catch this. You should also make some phone calls and view active properties in your area. Even if they don’t appear in your wheelhouse you can get a feel of price points and what else is out there. You may also meet real estate agents and possibly fellow investors at open houses or brokers open’s which can turn out to be long term business partners.
- Debts and expenses. Down time is no excuse to sit on your hands and do nothing. It is the perfect time to break down every aspect of your business. One of the most important areas of your business is your expense sheet. If you don’t know where your money is going it is difficult trying to reduce expenses. Business revolves around debts and expenses yet very few people like to dig into them and get their hands dirty. It may seem like a daunting task, but you need to put every expense on a dedicated spread sheet. If you have multiple rental properties you should list each property separately. List the expenses you pay monthly, quarterly and even seasonal maintenance. After you have broken every expense down you should look at whether they are useful and if they can be reduced. The ability to reduce your expenses, even by a little bit, can make a big impact at the end of the year.
- Realtor lunch. Regardless of how you find deals a good real estate agent usually ties everything together. As you are in between deals you should sit down with your agent and make sure you are both on the same page. Discuss lead generation strategy, price points, markets and property valuation. Ask them point blank if there is anything you are doing that needs to be improved or changed. You may be holding on to old strategies or techniques that are outdated and don’t work in your market. Without thick skin you won’t be open to new ideas and you will end up right back in the same place. You never know when talking to your real estate agent will spark a new idea that changes the way you run your business.
- Mortgage broker. A good addition to any investing team is a quality mortgage broker. Not only can they offer up new programs that can help get some of your deals closed but they also may have access to deals. There are many deals that don’t work for a broker that make more sense for an investor. If the mortgage broker knows that you will treat them right and always do what is best, there may be more leads to come. You can give them first crack on any properties you have to sell in return. It is not a stretch to say that a good mortgage broker can provide at least one quality lead every month.
Down time does not mean you should stop working. In fact, now is time to work even harder to get your business going again.