These 10 Investor Action Steps help you understand the steps you should take at each point of your investment journey and offers a clear roadmap for building a strong foundation. These steps will not only prepare you to become a property owner but will help you take better control of your finances.
Let's get started!
Question 1 of 10
1) Current Cashflow: Do you understand your current financial situation?
Yes, I track my monthly expenses and know my current cashflow.
I review my monthly expenses and identify areas where I can save.
I've determined exactly how much more income I need monthly.
No, I need to work on tracking my income and expenses.
Question 2 of 10
2) Credit Score: Do you know your score and monitor your credit?
I pay my bills on time and don’t have 30 or 60 day late payments or collections.
My credit isn't in the range I desire, but I you know how to improve it.
No, I'm unsure what my credit score is.
I know my score but unsure how to improve it.
Question 3 of 10
3) Debt-to-Income Ratio (DTI): Have you calculated your debt-to-income ratio (DTI)?
Yes, my DTI is below 43%.
Yes, but I'm working on paying down debt and/or additional income to improve it?
No, I'm unsure what my DTI is currently.
No, I'm not sure how to calculate my DTI.
Question 4 of 10
4) Down Payment: Do you know where you will get the funds for your down payment?
Yes, I've started saving specifically for my down payment.
I know the minimum down payment required for the type of property I'm interested in?
Yes, I currently have a cash reserve or other liquid assets that would cover your down payment?
No, I'm unsure how I will cover my down payment.
Question 5 of 10
5) Liquidity: Is your liquidity or cash reserve sufficient?
Yes, I have enough cash reserve or liquid assets to cover my down payment, closing costs, and unexpected expenses.
I'm not comfortable with my liquidity, so I'm partnering with someone for that reason.
I have enough cash reserve to cover 6 months of your expenses.
No, I'm still working to figure that out.
Question 6 of 10
6) Budget: Have you solidified a budget for your next investment purchase?
Yes, I have you created a detailed budget that includes all potential property expenses, such as mortgage, maintenance, and property management?
I'm prepared to handle unexpected costs without financial strain.
I have a method for underwriting deals to ensure there is sufficient cashflow such as with software, an app or a spreadsheet.
No, I haven't started analyzing deals yet and I'm unsure about my budget.
Question 7 of 10
7) Area: Have you determined 2-3 neighborhoods within your comfort zone?
Yes, I've researched the areas where I plan to invest?
I understand local market trends, property values, and rental demand in my target neighborhoods?
Yes, I'm planning to invest in a neighborhood I'm familiar.
No, I am unsure what area I will invest in.
Question 8 of 10
8) Team: Have you solidified your team to assist from your purchase to property management?
I've started building a team of professionals, such as a real estate agent, lender, attorney, and contractor.
I have trusted contacts or know how to find experts to assist throughout my investment process.
I have a plan for self-managing my investments or finding a property manager?
I'm still working on my team.
Question 9 of 10
9) Systems: Do you have systems in place to maintain your properties?
I've developed systems for managing your properties, including rent collection, maintenance, and tenant communication?
I'm considering or already using property management software to streamline operations.
I have systems in place for managing your properties that allow me to delegate tasks without confusion.
I'm working to get systems in place.
Question 10 of 10
10) Diversify: Do you have other investments outside of real estate?
I have thought about how I will diversify my real estate portfolio over time.
I'm open to exploring different property types or markets to balance my investments.
I have other investments outside of real estate such as a money market account, stocks, bitcoin, etc.
I haven't gotten there yet.