If you tell someone that a property is going to bring in $500/month in positive cash flow, and then it only brings in $380 each month, they will be disappointed. But if you tell them that the property will be neutral cash flow, and then it brings in $380 they will be thrilled.

We’d rather undersell someone and have them decide not to invest with us than over sell, have them invest with us, be disappointed, and be an unhappy partner.

5. Communicate Regularly

We partner with people that don’t expect us to give them a glossy annual report each year. They don’t expect a weekly progress report. We do, however, always give them updates and advance notice of money coming in and going out. And, we keep them up to date on the property. If a tenant moves out, we let them know. When the unit is filled again, we let them know. If we foresee a major expense coming, we give them a heads up. If we just learned of some recent sales in the area that indicate our property has gone up in value we let them know. If there is bad news in the market, we will reassure them about their investments. But, we do this informally. A quick phone call or an email when there is something to tell them.

And, if they call or email us, we get back to them right away. If you have money in the bank and you want to check on it, but nobody is answering your calls and you can’t get online to see how your money is doing, you will lose confidence in that bank. The same will happen to your partner if they can’t talk to you when they need you.

We found that because we take care in choosing our partners, and ensure we are all “singing from the same song sheet”, we rarely get calls from our partners. And, we also find that our circle of trusted partners is growing without us trying. And thank goodness, because now that I am retired from my job, and my husband is close to doing the same, we’ll have more time to find great deals, but less cash coming in to pay for them!

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Published on March 3, 2009