david Nachman
Attorney and Real Estate Investor David Nachman is the member of the month at Mid-America Association of Real Estate Investors (http://www.MAREInet.com)
Investing as a Private Lender for acquisition and rehabs with investors who have a proven track record, David has focused mainly on residential single family homes because it is the best way to minimize risk. If a problem should arise, these are the easiest to sell or to develop other exit strategies.
When asked about mistakes he sees new investors making, he comments that some novice investors rely on information or statements of others that are unreliable. It’s essential to know your market and your property so that you know your project is likely to be successful. Every deal has two major parts: the buy and the sell. The investor should have several exit strategies developed in case the first one does not work.
With experienced investors, the problem seems to be over leveraging. Using OPM (other people’s money) is a great way to maximize profits, but it can also drag you down if the market turns when you have too many properties and too much debt. The investor needs several business plans that anticipate changing markets, so that cash can be raised and debt paid off if necessary.
The most important thing he stressed for new investors starting out is that if you intend to hold property and rent it, nothing is more important that thorough screening of your tenant.
He left us with the concept that when contracting for the purchase, the rehab, the lease, and the sell, it’s essential that all terms be addressed in your written contracts. You want to anticipate likely problems and clearly define who is bearing the risk so there are no surprises if something changes.
To find out more about David, please visit his web site at http://www.NachmanLaw.com or call his office at 816.285.6029. For the month of July, David is offering a free 15 minute consulation to members of MAREI.
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