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How to Ensure You Never Invest In a Bad Deal

I doubt this was written based on owning investment property, but there is an old Chinese Proverb that says

“No man who gets up before dawn 365 days a year fails to make his family rich”

….maybe that explains the mentality (or insanity?) that enabled Chad and I to cover three of our core geographies from Sunday afternoon on the 18th through Wednesday afternoon the 21st reviewing ours and our clients investment properties.

In this case, maybe the expression should be paraphrased to:

“No team who meets with their market teams and drives and/or walks all of their investment properties in all of their markets (as well as evaluating some new real estate investments) in 3 days fails to make their clients successful”

Investment Property Due Diligence

When we go through our investor training classes we preach the need to understand not only the macro-economics of the market area and the micro-economics of the property as an investment, but also the need for having the right team(s) in place, the right neighborhoods/blocks selected, and the proper care and feeding of the property….and trust me when we say we practice what we preach. To that end, we felt it might be interesting to give you some perspective into some of the highlights of our trip…

Sunday:

11:30 AM to 1:00 PM – Chad and Dan fly to Cincinnati, OH from Richmond, VA while working on emails and other devices “when portable electronic devices where now available for use” (and sometimes even when not).

1:30 PM to 3:30 PM – Drive from Cincinnati, OH to Indianapolis, IN while eating [not-so-healthy] food and manipulating the GPS to try to determine the optimum way to visit current investment property in Indianapolis as well as drive some new neighborhoods with our broker team while there was still daylight.

3:30 PM to 7:00 PM – Utilize any sunlight possible to walk existing properties and drive areas noting additional areas/blocks for our brokers to concentrate on and/or ignore.

7:00 PM to 12:00 PM – Drive to Grand Rapids, MI reviewing and documenting findings from Indianapolis and creating content for additional educational products to be released shortly.

Monday:

7:00 AM to 9:30 AM – Chad and Dan working session on Grand Rapids investment property status, area discussion and focus, etc.

10:00 AM to 1:00 PM – Chad and Dan meeting and property reviews and walk throughs with Grand Rapids Property Management team.

1:00 PM to 5:00 PM – Grand Rapids Acquisition and Investor meetings as well as additional property review.

5:00 PM to 11:30 PM – Drive to Cincinnati working through take-aways from both the Indianapolis and Grand Rapids visits (laptops really are a wonderful thing).

Gastric Note 1: 5:30 PM – Ate dinner at most random “Irish Pub” in Kalamazoo, MI with a very unique combination of: 1. Absolutely no Irish people at the establishment; 2. 80′s Pop Music playing on the stereo uncomfortably loudly; 3. Wait-staff that had never actually eaten 95% of the items on the menu and could therefore make no recommendations; 4. A large group of 7 or 8 women in their 60′s who were actually talking about various fried foods, including “fried butter” (seriously, I can’t make this up). Good food though.

Gastric Note 2: – After fried pickles and other sundry culinary delights, Chad and Dan swear that they’ll eat healthier the next few days based on the constant influx of nothing but caffeine and fast food.

Tuesday:

8:00 AM – Meet with Ken Guthrie – Preferred 10/10 Group 2 and MFAM Investor at hotel.

8:00 AM to 1:00 PM – Chad plays tour guide for this investor as we walk-through Ken’s current properties under ownership as well as do some additional property walk-throughs, reviews, provide neighborhood tours and get him introduced to our Title Team and Property Management team in Cincinnati. Ken and Dan ensure seat belts are correctly fastened and pray silently as Chad multi-tasks while driving.

Gastric Note 3: 11:30 – Eat at the classic, historic, and “intestinally” challenging “Price Hill Chili”. Chad and Dan order not-so-healthy items off the menu thus instantly failing as originally planned (See Gastric Note 2).

1:00 PM – Pick up Group 4 10/10 and MFAM Investor, Janetlee Piliterri at Airport.

1:00 PM to 6:00 PM – Chad continues as tour guide for both investors driving various neighborhoods and blocks in the Cincinnati and Northern Kentucky where we (or our current clients) hold and purchase property.

Gastric Note 4: 7:00 PM – Chad, Dan, Ken , our local Property Manager and others eat at the Hofbrauhouse (http://www.hofbrauhausnewport.com/) sampling various and sundry items that again violate Gastric Note 2.

Wednesday

7:00 AM – Check out of Hotel 7:00 AM to 12:00 PM – Drive by and (where possible) walk through properties that have not yet been visited as well as walk through a new Special Project Investment (10 unit apartment project right next door to a well known private university – Look for more information in the November Newsletter).

2:30 PM to 4:00 PM – Flight back to Richmond, VA where Chad and Dan promise to cross reference all property notes so that we’re on the same page that night.

2:35 PM to 3:55 PM – Chad falls asleep immediately upon take-off. Dan does email cleanup. Information cross reference happens the next day…

So there you have it. A view into one of our typical trips out to visit some geographies. Could we take our time and do it over 5 days, sure, but then we’d miss more time with our families – one of the core values of 37th Parallel. Could we cover less ground and cut corners? Sure, but then we’d be creating blind-spots in markets and doing ourselves and our clients a disservice…also, if you’ve met Ed, there’s no way we could get away with going at a slower pace!

PS – Note we do the above every 30-45 days per market!

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