Become a Blackbelt in Acquisitions to 10X Profits

Hey ,

How you do your acquisitions determines how the rest of your investment will go: "Everything starts and ends with acquisitions…"

"You make your money at acquisition."

My good friend Brian Burke says it another way, "you make your money at the acquisition, but you get paid when you F*ing sell."

…Or another great phrase I've heard (and have said more than once) is "I never lost money on a deal I didn't buy."

Most of us investors have heard something like this more than once.

Yet, I believe there is so much more to these words than what’s on the surface. In fact, my real estate business became more streamlined and profitable the more we focused on making money with the acquisition.

For this week’s newsletter, I want to spend some time unpacking this, and diving deeper into why and how focusing on the acquisition can change your entire business for the better.

Inside the Trenches

Lets start with the obvious:

You have to first buy a “good deal” in order to make money on that deal. Seems pretty straight forward right? Can't make money on a bad deal. And for the most part, this simple explanation pretty much sums up "you make your money at the acquisition."

Now lets get into some of the less obvious:

Sooo...what is a good deal? From my experience, this is completely subjective and based on the individual investor and their specific criteria and strategy.

I have seen more than one “bad deal” that I pass on, end up being a great deal for someone else. I have bought "good deals" in my later career, that earlier in my career I would have said was a bad deal...same deal...different investor.

I read something that has stuck with me for the last 15 years, in one of the many Robert Kiyosaki books (I can't remember which one), where it said something along the lines of "An investment isn't risky, the investor is. A great investor can turn a 'risky investment' safe, and a bad investor can turn a great investment risky..."

You get the point.

The better you can identify a “good deal,” the better acquisitions you will have, and the more confidence you will have when investing in real estate.

In order to feel more confident on a deal, it requires gathering the most amount of data you need in order for YOU to feel the most confident about buying a deal. Does that make sense?

So the question is: what data do YOU need when analyzing a deal, in order to feel the most confident about buying that property (or not)?

This...is different for everyone. It can also change based on your business and your level of experience.

Here is a complete list of the data that I personally want on every deal in order to feel the most confident about determining whether to buy a property or not. The fewer data points I gather, the less confident I am, and the less likely I buy:

1. Full pictures of the subject property.
   
   I want FULL pics. The better the pics, the better chances we can determine as-is value, rehab scope, costs, and potential ARV.
   
   (Have you downloaded a copy of my Property Walkthrough Guide?)
   
   

2. Comparables — as-is AND After Repair Value Comps (3 ARV comps at least, within a reasonable distance from the subject property based on that markets standards)
   
   

3. Pictures of the comps!
   
   This one seems to get missed for some reason by realtors all the time...we always have to ask for this. Many agents just send a CMA, or a list of addresses for comps, but no links to the listing or pics. I want to see the comp pics in order to understand level of finish and floor plan we need for the ARV on the property.
   
   

4. Initial scope of work — what basically needs to get done in order to hit target ARV on this property.
   
   Is it a 3 bed 1 bath that needs to be a 4 bed 2 bath? Let me know if possible.
   
   

5. Very basic floor plan sketch of the subject property as-is.
   
   This can literally be on a napkin.
   
   

6. We have had someone look at all the "red flags" on the subject property or we have pictures.
   
   For example: roof, foundation, HVAC, electrical, plumbing, weird floor plan, busy street, junk yard neighbors, etc.
   
   

7. Prelim Title, if it was pulled. If not, then we will have a title contingency on our offer.
   
   Need to make sure the “owner” really is the owner and any other liens that might be on the property.
   
   

8. And then finally...all of this data is neatly saved in a Dropbox folder (Google Drive is fine too if you prefer it).
   

Lets get into the even less obvious now:

The more data, the more planning, the more prepping I do at acquisitions, the more streamlined, more accurate profit margins, and less surprises I'll have with the rest of the project after buying.

Everything we do at acquisitions, should benefit the project later on.

We started with this question — "what information can we get when analyzing a deal, that will make the rehab and rest of the project easier?" By asking this, we began to play a game in our business that totally changed everything we do…

Refining that even further, we then asked ourselves: "If we are only ever allowed to walk the property ONE TIME and ONE TIME only, what information and data do we need to gather when we walk that property, in order to make sure we can complete the entire project with confidence?"

This one question changed how we analyzed deals and handled our acquisitions going forward. So what was the one thing we ended up spending the most time on when we walked a property?

We got REALLY REALLY good pictures of the property — then created a solid Standard Operating Procedure around how we take pictures, and trained everyone on it.

Having amazingly well done, thorough pics, taken the same way on all properties, makes analyzing rehab, ARV, red flags, etc so much faster and easier. It also allows you to include multiple people on the analysis and have all of them do it from the comfort of their computer at home (or the office), with the pics.

The better we got at gathering the data and planning (finding red flags, determining SOW's, planning out the strategy for the ARV, solving issues and collecting data) AT the acquisition, the better and easier the rest of the business got. It also helped us create realistic numbers for our targets on the deal, ones that we were confident in.

Lastly, getting better at analyzing the acquisition and creating better processes around it also eliminated doing the work twice. What do I mean?

There was more than one time where work that was done by the acquisitions side of our business was not stored or saved (or thought to be), and our rehab side of the business had to do the work again.

OR the rehab team had no clue what the strategy was in the first place for the deal, so they would make up their own strategy/scopes/plans for the project even if another one was already created (because no one communicated it). Silly times in my business, but easy to have happen when you are just going 100 miles an hour.

There is a lot more to unpack and dive into, but that will have to be for another newsletter.

At the end of the day, this is YOUR BUSINESS, and you can do it any way you wish. It’s the best and worst part of being in business for yourself. Despite that though, this business is a lot more fun when you are a lot more confident in your decisions and investment purchases.

And this only happens by getting clear on what a good deal is and gathering all the data you need in order to feel confident in your purchase.

Announcements

Our next Flippers Anonymous meetup and in-person workshop is coming up!

Workshops are fun because I love to see the light-bulb-aha moment. Attendees walk away feeling empowered, confident, and equipped with practical tools and strategies to streamline their acquisition/planning/rehab and other processes.

Check your calendars for mid-October. Reply and let me know, what weekends work for you??

Talk soon,

Tarl

Ps. Looking for something more 1:1 and personalized to you and your business? I opened a few spots in my coaching schedule, if you’re interested, make sure you go apply.

I will challenge you big time personally and start helping you piece your business together the way you want it to be. Make sure you read this page fully to see if you are a fit.