Track records in any business are important. It gives you a gauge on what the business is doing and whether or not it’s profitable. Before I invest in anything or buy anything I want to see the business or product track record or testimonials. This will give me the info I need to move forward.
The same applies in real estate. Many out there make claims about how many deals they are doing, the big profits they are making and how fast they are doing so. There are definitely successful investors out there getting it done, however, there are also those who just talk the talk.
My partner Marty has a saying when we run across these folks, “Big hat no cattle”. The best way to smell out these jokesters is to ask for the HUD1’s and their P&L’s for the properties they are selling.
This track record is what investors want to see before they place their money on your fix and flip venture. They want to see the facts and numbers. They don’t want to risk their cash on an idea or a possibility. You must have a track record to raise capital for your deals.
So if you’re new to this or thinking of getting into fixing and flipping you probably don’t have a track record yet right?
Then how do you launch your business without one? How can any investor take you seriously? This is obviously a hurdle that stops many before they can start.
The answer is simple.
Find a fix and flip investor that is already doing exactly what you want to do and align yourself with them. Be of service to them. Offer up your services for free for an opportunity to learn from them.
As you start to be of service to them their track record becomes your track record because now you’re working with someone who is fixing and flipping properties. Now you’re working with someone who averages a profit of X per property.
When I first started out I obviously didn’t have a track record. The only thing I was armed with was education I had from seminars. So did I raise money for the properties I was looking for? It came from meeting a fix and flipper at a networking event.
This individual was a player. He had fixed and flipped about 13 properties in a year averaging about $30k per flip. I wanted what he had. So I asked him how I could be of service to him. I told him I was getting in and eager to learn or take any tips on how to do this.
He naturally couldn’t resist my charm so he said game on. He told me that if I found a deal that made sense he would fund it, I would use his resources to rehab it and sell it. If I did this he would split profits 50/50.
Now I had a partner that rehabbed 13 homes with an average profit of $30k per flip. His track record also became mine as I did deals with him.
My first deal with him was a total net profit of $38,000, which we split 50/50. Not too shabby right? Eventually after about 4 deals it was easier for me to raise my own money with the track record I was creating.
Now get off your butt and go create a track record!