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Credibility Your Most Valuable Asset

Aug 17, 2007
You can prevent this from happening to you if you have careful planning and you avoid making promises you can't keep as well as be honest in all your dealings.

An instance that I have seen happen to many "newbies" in the wholesale/retail market is that they develop a relationship with a realtor, make offers on properties, and then don't have a plan in place beforehand of how they are going to finance or wholesale the property.

So what are you going to do when you're two days from closing and you don't have a reliable buyer and/or you don't have financing in place?

Quite frankly, you're probably going to have to let the deal fall through and lose your earnest money. But the worst part about this is that the realtor is never going to want to work with you again and the news will spread fast through the RE community.

Please don't let this happen to you. Go get your preapprovals for hard money BEFORE you buy a property; develop a good buyer's list of rehabbers if you're wholesaling; and find some potential money partners who can help you out when you need it.

Don't sign a contract (your promise to buy) on a property unless you have a plan of how you're going to close the deal and have the resources to make it happen.

I'm not saying that there aren't other investors who have bought without having any financing or a buyer yet and then closed it just fine.

There are, and you've learned everything you need to know at the bootcamp to make this possible. But if you're not diligent enough in finding a buyer or just plain unlucky, then you've left too much to chance.

The same goes for when you're buying Pretty Houses. Don't promise to make those mortgage payments when you know you can't if you don't find a buyer fast enough. Always give yourself some room to breathe so that you can handle any potential hurdles.

Make sure you know what your exit plan is and exactly how you're going to make that happen, i.e. marketing/selling efforts, and don't delay. And plan for your contingencies - what are you going to do if something doesn't go as planned?

Plan for it. I always like to have a Plan A and a Plan B (and sometimes a Plan C). Plan A is the way I want things to go, and Plan B is what I'll do if Plan A doesn't work out. It'll help you sleep better at night, too.

This is an exciting business and the profit potential is even more exciting to most of us. I know you all want to just jump in and are dying to make your first deal. But nobody starts a job without going through orientation first. And part of orientation is learning who works in each department and who you need to go to for what.

Well, you've learned through SDI how to do your job, but you still need to know who to go to for your money or who you're going to sell to or partner with, etc., etc. Finish your orientation process.

Know who your financing sources are going to be or have a list of buyers, or a money partner, not to mention the other people who are going to help you through some of your deals, such as an attorney, title company or realtor.

If you're really lost with respect to where to find these people/resources, you can find lenders on th Hard Money Lenders list right here on this Web site, and then the rest you can get from networking from investors who are local to you and/or are members of your local REIA.

Don't be afraid to ask other investors for help, referrals, etc., because, quite frankly, 99% of all investors, mortgage brokers, etc. I have met or talked to are very giving and are glad to help.
About the Author
Richard Reichmann is internationally known as a millionaire maker. He's a leading consultant in real estate and internet marketing strategies that are profit proven.

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