Deal Pipeline Ten: Funnel Phase

I have a property lead. What now?

If you’ve followed the instructions in the previous posts in this series, you should start seeing some possibilities. So now what? You’re going to start culling your leads in steps. As you go through each step you will eliminate possibilities. In general you want to learn the following things:

1. Profitability (regardless of exit strategy)

2. Holding costs (initial rehab, on-going expenses)

3. Suitability (the “fit” with your circumstances and business goals)

4. Non-quantifiable issues (location, surroundings, market trends)

5. Size scope and expense of rehab

6. Title issues 

In general the larger the deal, the more intense the due diligence will be. But none of the preceding six items should be ignored regardless of the size of the investment. Once you have a property or two that have made it to the bottom of the funnel, you can choose according to your capacity or preference.