Breaking down the investment, investment holding and finally exit into its component steps is a good first step toward achieving your cash flow and wealth building goals from rental real estate. Next, providing the tools, information, processes, considerations, and vendor resources under each of the component step area is an effective way to assist the new investor or to improve the game of the proven professional or veteran investor.

To accomplish this investing goal, this article proposes an investment model. The models components are:

General Partner and Investor Preparation

Project Identification and Qualification

Business Plan Development

Operations

Marketing & Sales (Developing Investors, Buyers, and Tenants)

Purchase Contract

Closing and Initial Operations

Debt and Equity Financing

Investor Communications

Exit Plans

This model does not attempt to reduce the investment process into more “salient” points. Depending on the investment opportunity any given requirement can become very important. As a result, the association does not believe in providing a “simplified” view of the process.

Instead this model is developed intending to allow the investor (whether new or very experienced) to view the steps for a given area without the confusion and clutter of considering all the items simultaneously. In effect, the model makes it easier to eat the elephant a bite at a time and avoid choking on the entire beast.

Supporting this concept investors must identify a resource that will provide a comprehensive set of tools, market information, and other items outlined within this structure. The investor will then be able to step through these items as they approach a new investment, prepare for their first investment, improve the performance of an existing investment, or move toward an exit from an investment in a organized and thoughtful sequence.

The model will provide the structure to allow the investor to assure themselves that they have not overlooked any critical steps. Further, if you are investing through another group, the model will provide a means for the novice or less involved person to more effectively assure that the correct steps and risk mitigation is in place protecting their invested capital or to make a decision not to invest in the opportunity.

Investors should avail themselves of all means possible to assure that they have mitigated risk, protected planned cash and income returns, protected their asset against catastrophic loss and have a thorough grasp of the issues. The investment model is an important tool for this purpose.