5. They don’t have a plan for any part of their business. A 4-6 month marketing plan should be laid out. It should include the type of marketing, when it will go out, how it’s going to be done, and how much is in the marketing budget.

Many investors don’t plan out their rehabs. They don’t look at the property they are about to rehab and decide exactly what they are going to do and figure out how much it’s going to cost. They don’t really have a financing plan so they don’t know where the money is going to come from to do a deal. They just figure they will get the money from somewhere. Since they haven’t planned out the rehab, they are unsure of how much it will cost and usually run out of money. Now they have to cut back on the renovation. This then hurts the sale of the house because the most common things to be cut from a renovation is all the "extras", or the stuff that the customer actually sees. All of these problems come simply from a lack of planning in the beginning.

Always have a plan B. You want to know that if your financing doesn’t work out you have somebody else that you can go to. If you wind up needing more money for this project, there’s another source. I tell investors all the time not to tie up their own personal cash and credit in rehabs. Save those for rainy days in case something goes wrong. When you plan ahead and you also have a plan B, there are very few surprises that are going to come up in your business. And when they do come up, you already have it taken care of. Otherwise it is very very difficult.

6. They don’t study and know the marketplace. In other words they don’t try to really find out what is going on in the market. What’s selling, what’s not? What’s a hot area, what’s not? Is it a buyer’s market or is it a seller’s market? You can make money in either type of market, but as an investor you need to know which market you are in so that you know how to structure your deals. You have to understand what your buyers are looking for. What price range are they looking for? What amenities are they looking for inside the house? If you know all of this information, you will know exactly what to deliver your buyers.

If you are going to renovate a property the best way to be sure that your house is sold first is to give the best price and amenities. Make sure your house is priced properly for the marketplace it is in, and that you have the right amenities as compared to the other houses on the market. You have to go and see the other houses on the market. You have to know what’s happening. What are the buyers looking for? What kind of buyers are coming in here? Are these second time homebuyers or first time home buyers? Are these people more selective about their house or less selective? Even if you are wholesaling it is the same idea. You have to understand the marketplace you are in and if it is hot or not because your investor buyers are going to be doing that same homework. So why would you want to be marketing in an area where nobody wants to be in? Make sure you are out studying the marketplace and know what other investors are doing, what other homeowners are doing, and what your buyers and other sellers are looking for.

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