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The Drive Toward a Successful Investment | Part 1 - Deal Sourcing and Analytics
Posted: | Author: John Seeburger- President of Foundation
In the dynamic world of real estate investing, envision your next loan as a high-performance race car and you as the driver speeding towards the checkered flag (a successful sale or capital event). Every successful race car driver relies on a high-performance vehicle and an expert crew to execute a series of pit stops that are highly choreographed to shave seconds off that driver’s time. In a competitive real estate market where speed and certainty of execution win the race (i.e. close the deal), a high-performing lending team is essential. In this blog series, we explore the parallels between a well-executed real estate transaction and the precision of a Formula 1 pit stop, where your loan is the race car, you are the driver, and the Foundation deal team is your pit crew. Each team member is an expert in their role, and all are working in a synchronized manner on a parallel path to close your loan in the shortest time possible. In a time-sensitive real estate transaction, the Foundation pit crew orchestrates a seamless process from start to finish (the pit stop) to get you back on the track toward the finish line (a successful closing).
Part I – Deal Sourcing and Analytics
You may not think to contact your lender at the deal sourcing stage, but this is the ideal time to connect with your Foundation investment professional (AKA the Pit Crew Chief). This step goes beyond the conventional lender’s role, as he or she becomes your trusted partner in assessing your new deal's financeability and overall profitability. Your Foundation Loan Officer acts as a sounding board, offering insights garnered from the experience of seeing numerous deals across a spectrum of buyers and geographies, and serves as a second set of eyes to ensure the investment aligns with your goals.
Leveraging an array of data from public records, title information, and virtually every Multiple Listing Service in the US, your Foundation Loan Officer validates your acquisition assumptions for both the initial purchase and the future exit strategy, be it a flip or cash-out refinance. This collaborative approach utilizes advanced analytical tools to evaluate key deal elements such as purchase price, rehab budget, after-repair value (ARV), and rental yield. The result? A sophisticated return analysis and an accurate closing settlement estimate – all within minutes.
Here's where the real value of a solid commercial lender shines. In a landscape where each decision counts, having a lender who won't hesitate to tell you when a purchase doesn't pass the profitability test is crucial. As the saying goes, 'Sometimes the best deals you make are the ones that you don’t make.'
Your Loan Officer is there at the front of the process to optimize every move you make, fine-tune your strategy, and ensuring you are positioned for success. They are your Crew Chief, helping navigate the turns and straightaways of property investment with precision and coordinating with a team of experts to ensure speed and certainty of execution with your financing.
Key to working with a top-tier lender:
- Collaboration: The partnership between you and your lender becomes a collaborative effort aimed toward mutual success.
- Evaluation: Your loan officer functions as a trusted sounding board for your project’s business plan, offering practical insights.
- Structuring: He or she helps you forecast profitability and structure deals that align with your investment goals and risk tolerance.
- Analytics: Advanced data and analytical tools refine your investment decisions, leaving less to chance.
- Technology: Embracing technology streamlines the process, allowing for quick and informed decisions with minimal drag on your time.