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REFM's Seven Elements Of Successful Real Estate Investment Sample
REFM's Seven Elements Of Successful Real Estate Investment Sample
REFM's Seven Elements Of Successful Real Estate Investment Sample
REFM's Seven Elements Of Successful Real Estate Investment Sample
REFM's Seven Elements Of Successful Real Estate Investment Sample
REFM's Seven Elements Of Successful Real Estate Investment Sample
REFM's Seven Elements Of Successful Real Estate Investment Sample
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REFM's Seven Elements Of Successful Real Estate Investment Sample

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Sample of free E-book available at GetREFM.com under the Free Tools section

Sample of free E-book available at GetREFM.com under the Free Tools section

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  1. Real Estate Financial Modeling’s Seven Elements Of Successful Real Estate Investment
  2. ForewordForeword Welcome to REFM’s Seven Elements of Successful Real Estate Investment e-book! The Seven Elements framework is intended to give structure to and increase the potential for success of your real estate investment pursuits. The Seven Elements can be seen as steps to be executed in order, but when we are pursuing more than one investment at a time, we will naturally be performing more than one step simultaneously. When it gets busy, it is helpful to have a framework to follow to keep things straight from one transaction to another. I wish you all the best in your real estate endeavors. Bruce Kirsch Founder Real Estate Financial Modeling, LLC GetREFM.com
  3. getREFM.com 3 Table of Contents Element 1: Define your goal ................................................................. 4 Element 2: Identify your value add ..................................................... 6 Element 3: Form criteria and gather opportunities ......................... 8 Element 4: Determine attractiveness ............................................... 10 Element 5: Control the deal and capital .......................................... 12 Element 6: Execute on your plan ....................................................... 14 Element 7: Track and improve .......................................................... 16 Conclusion / Additional resources ................................................... 18 Copyright © 2013 Real Estate Financial Modeling, LLC. All rights reserved.
  4. 4 getREFM.com ElementDefine your investment goal and strategy in detail and put it down on paper
  5. getREFM.com 5 t If you don’t know what your goal is, you don’t know if you are moving towards it or away from it. Defining and describing your goal in writing assists you in refining and crystallizing the thoughts that lie behind the goal setting process. You may find during the course of writing and re-writing that the goal is actually something slightly different than what you originally thought it was when it was just an idea floating around in your head. Writing your goal down also enables you to create a list of relevant investment criteria that are necessary for you to achieve your goal (maximum investment amount, time to return of capital, etc.), as well as requires you to identify your intended strategy for value creation. If you have ever had what you thought was a brilliant business idea and it kept a hold of you long enough for you to commit it to paper, you probably remember that what ended up on paper was at least slightly different from what had first bounced into your head.The reason for the differences were that drafting and re-drafting the idea forced you to define and flesh out details that you were probably too excited to bother with when it was just a manic, relatively shapeless notion. It is the drafting and editing process that requires you to not only define the what, but also the when, why, how, and who. For example, if you want to acquire a value-add multi-family property, you need to begin to ask and answer dozens of questions, such as: What is the property worth? What is the current NOI? What is my strategy with respect to the unit renovation program? Who will perform the work? What will it cost? Why should I acquire this property and not another one in the same neighborhood? How much debt financing could I get to acquire the property? What will the interest rate be? Who will I get to co-invest? What level of control will they require? How long will I hold the property? As you can see, once you become more serious about the thought of the proposed investment, you have a lot of work to do, and putting thoughts down on paper helps you to organize that work, as well as to stress test the attractiveness of the investment opportunity. If you like what you see after doing your homework, you can move forward with confidence.
  6. 6 getREFM.com6 getREFM.com ElementIdentify your individual strengths and weaknesses, and that of your team as a whole, and address them
  7. getREFM.com 7 t Performing a candid inventory of your and your team’s core competencies with respect to knowledge and analytical and technical skills is critical to setting yourself up for success. You can never be too strong in any area, and it will benefit you to improve on your weak areas. Educate and train yourself and your team members to be equipped and ready for top performance, especially in times of high pressure and chaos. You can accomplish compiling a skills and strengths inventory by performing a 360-degree team feedback session.This is a great technique in which every member of the team anonymously (thus candidly) evaluates in writing every other member of the team, and then presents each team member with the completed questionnaires from their fellow team members. The questions that are on the questionnaire can be something like this: 1. What are [ Name of colleague ]’s most valuable attributes as a team member? 2. What is his/her greatest weakness as a team member? 3. In what areas is he/she strongest with respect to individual knowledge and technical skills? 4. In what areas is he/she weakest with respect to individual knowledge and technical skills? 5. If you could change one thing about the way he/she interacts with you, what would it be? Admittedly, answering these questions frankly about your colleagues can be difficult or awkward, but it is in the best interest of the team for everyone to be honest in their responses. My business school training included one of these 360-degree inventories with our learning team, and it was not easy to hear some of the things that were said of me. In retrospect, the things that hurt the most were the most valuable to my future development because I really took them to heart. All feedback, by definition, is valid. It is what you decide to do with it that determines your professional growth. The beautiful thing is that once you come to understand where you are perceived to be weakest, you can address those areas head on. If you are a great financial modeler but don’t have a deep knowledge of construction basics, you can bone up on construction knowledge, and vice versa.The more valuable you become to your team, the better off you are, and the better off the team is as well.

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