I am going to give you a sneak peek behind the curtain of an up and running real estate investing business. In our real estate investing business, we compile a Seller Property Information File that includes all the information we need to know to put together a deal. Here is a quick run down of what we include in that Seller Property Information File.
First, we have a Property Information Sheet that we use when we initially talk to a seller on the telephone. On this sheet, we write down all the info about the property, the seller and their situation.
Next, since I primarily buy and hold property as long-term rentals, I do my Net Operating Income analysis on the property using the Net Operating Income Worksheet. This worksheet allows me to run through all the income and expenses of the property to find out how much debt the property can actually support. This tells me what I can afford to pay for the property to have break-even or better cash flow.
Next is the Public Record Information Sheet that we print out from public records. It tells us information about the property, including the last time it sold, and any liens on it. It can also tell us who the owner of record is for the property (which occasionally is not who called you).
We also do a quick search for comparable sales to find out what we think we could sell the property for. If you have access to your local MLS or an extremely helpful real estate agent or broker, you can get this information from them. Otherwise, you may need to compile this data from public records or free websites that help you determine property values.
If there are any recent MLS listing sheets including Active, Expired, Previous Sales and Listing History sheets, I like to include those in the file as well. That way if I need to go back and look at what happened in the past through the MLS, I will have a much better understanding.
Next, I print a map and directions from Google Maps. Obviously, I don't want to miss my appointment with the seller because I got lost along the way.
I usually also run my full Offer Generator Analysis on the property and include a print out of it to give me an idea of the various offers I can make on the property. I can adjust them when I get out there if I find the house needs more or less repairs or is in better or worse condition for sale than I anticipated.
You should have a car file full of all the standard documents that you need. I like to include my Credibility Packet and, of course, a blank Contract To Buy.
My assistant will usually help me get the entire Seller Property Information File together before I go out to meet with the seller.