Business Systems and Tools
Over the last few years of investing in real estate, we have discovered there
are easy ways to do things, and there are hard ways.
The following topics describe various tools and systems we have developed over
the last few years to simplify our lives, and make our real estate investing
more structured and less stressful. All of these items have also helped make us
treat our investing more like a business, instead of a hobby.
Property Analysis
The first thing we had to develop was a way to analyze properties to determine
if they would produce positive cash flow. Having read many real estate books
over the years, we had some basic understanding on how to do this, but we didn't
have any sort of system or tool that was Canadian and worked within our
country's unique rules. So we created our own property analysis spreadsheet!
This tool evolved over time as we gained more experience, learned the nuances of
particular markets, and discovered new investing techniques. But the most
important thing it allowed us to do was to analyze properties in a consistent
way each and every time, as well as compare one property to the next. This was
critical! If there was no consistency, we couldn't know if a deal was good or
not.
Today, we analyze many properties without even seeing the property or calling a
realtor. This method has saved us significant time and allowed us to find the
hidden 'gold nuggets' that other investors miss. It has also helped us stay away
from properties that at first glance seem like great deals.
Financing, Insurance, and Legal Questions
Our first real estate deal was a flurry of confusion and stress. The
professionals we dealt with, including lenders, insurance brokers, and lawyers,
all had many questions that needed answering before they could continue with the
purchase.
The second deal was also stressful, but we started to notice the questions
were sounding familiar. By the time the third deal came around, we knew what to
expect. We wrote down what each professional required and tried to provide them
answers in advance by creating some basic forms with blanks to fill in.
For example, our insurance broker always asked the same questions. Some of
these included: square footage of the property, age, number of units, and type
of wiring (e.g. copper, aluminum, etc.).
Our fourth and fifth deals were much less stressful, because we knew what to
expect and we had the answers ready. Future deals with be even easier as we
further refine our forms.
Dashboard
When investing in real estate, you have to keep track of many things
simultaneously. For example, contact information for your professional team,
deals being analyzed, action items for each property, utility account numbers
for each property, etc. Keeping tracking of everything was daunting for us at
first, but we soon settled on a good system.
We created a business 'dashboard' using a spreadsheet with separate tabs for
each category of information. This helped keep us organized and on top of
everything required to close and manage a deal, as well as run our business.
Information Systems
One of the technological tools we use to simplify our lives is a service
called Single Number Reach offered by Bell Canada. Instead of adding a second
phone line in our homes, the service provides a virtual phone line for clients
to call and leave a message. It also offers a customized menu system to route to
various locations, including forwarding calls to another number (such as a cell
phone) based on the time of day.
When we first began advertising for tenants, investors, etc., we gave out our
home and cell phone numbers. However, we quickly realized we were at the mercy
of callers (especially tenants), so we took control and signed up for Single
Number Reach (called PrimeLine back then). This one step greatly reduced our
stress and allowed us to call tenants back when it was convenient for us.
All of these items, and many more, have helped us immensely to stay organized,
reduce stress, keep on track for our goals, and project a professional image to
our clients. Hopefully these ideas will also help you to succeed in your real
estate investing endeavours.
This article is copyright © 2004-2010 Spirepoint Properties. All rights reserved.
Paul Blacquiere and Joanne Beehler are full time real estate investors and have been investing in Ottawa, Ontario, Canada since 2002. They are owners of Spirepoint Properties, a Canadian real estate investing company dedicated to making real estate investing easy.
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