Coach Carson On The Importance Of A Due Diligence Checklist

In this episode, Chad Carson shares about the importance of having a due diligence checklist for buying new properties.  Get Chad's checklist here: https://www.coachcarson.com/newsletter/  Checkout Chad's Podcast here: https://www.coachcarson.com/coach-carson-podcast/  --- Transcript   Michael: Hey, everybody, welcome to another episode of the remote real estate investor. I'm Michael Albaum, and I'm joined by my co host,   Emil: Emil Shour.   Michael: And we have a very special guest for this weekend wisdom. Chad Carson is with us again. And Chad's gonna be giving us a little bit of insight into how he does his due diligence and some tips and tricks he's developed over the years to do it really well. So let's get into it.   Chad, we were just chatting about a process that you use to close on every property that you close on, right?   Chad: Yeah, basically, I think the analogy we used was, you know, when you get in an airplane, and you see these pilots at the front of the airplane, and they're, they're walking around the plane, they're looking at things, they're testing things, they basically are going by a checklist, because who wouldn't look at a checklist to make sure you don't make a mistake before you put a huge metal plane into the air right with all these passagengers in the back? And I guess my point was, why wouldn't a real estate investor before they go buy a property with hundreds of 1000s of dollars or at least 1000s of dollars? And this might this property might be with you for a while right? And you want to make it work? Why would you not have some kind of process, some checklists that you would use when you're buying a property?   So I guess my main message is like, have a checklist, right? Even if it's like three or four things, what are the things you got to do and check those off the list, I started doing this with my business partner at the very beginning of our business, we just got lucky and read a book called The E myth, e myth mastery, I guess, just the E myth, right when we started our business, and that was that idea of checklist was like at the heart of that book. And so we just embrace that. And the idea, though, is that you can build a checklist for everything in your business, everything in your life if you wanted to. But every time you do a process, you're simultaneously doing the thing.   So you're closing on this property, you're doing the closing. But you should also be thinking about working on your business, and actually writing the checklist so that the next time you close on the business or the property or if you delegate it to somebody else, they can actually go through and do that same process as well. There's the kind of lesson itself of the closing checklist. And there's the meta lesson of just building your business around standard operating procedures and checklists. That has been so critical for everything we've done.   Michael: I think it's so interesting. And I know for me that confidence can be the like, biggest enemy here. And that Oh, yeah, I've done this 10 times, what do I need a checklist for? But to your point, I mean, that's when people really start to get complacent and mistakes get made. And so I'd be curious to know what's on your checklist.   Chad: Some of them are really mundane, like, hey, you're about to buy this property, make sure you turn on the utilities. Yeah, it's pretty straightforward, right? But I had some properties you bought and all the contractors show up and they're like, Hey, is the power on can't turn ourselves on. We'll be back in a week. Because we have other jobs, we have to get to now like, Nooo, delivering the dumpster like some of those kind of just like transitional pieces, those are definitely on there.   But even before that, I've got some items about how to like to send a instructions to the closing attorney or the title agent. That's a part of the checklist. And then there's a much more detailed checklist about due diligence. So once you get a property under contract, you get this period that we probably all have heard of where you just want to make sure that all your assumptions are right, make sure the values is what it thought you was, make sure the repairs are what you thought they were. And so that's a much more thorough list.   Everything from checking out like red flags in the neighborhood, making sure there's not like a vicious dog like jumping in the backyard, go different times a day. Look for powerlines look for weird smells look for it as we did every time I made a mistake. I kept on adding it to my checklist saying, Alright, there's another mistake that I'm gonna add to the checklist, right? So it just helps me to think through the deal and to analyze it, I think we're all susceptible to is that you you get emotionally attached to a deal. Like you want to do this deal. You get committed, like once you've started moving, once you're committed to it, you made the decision, you don't want to like show yourself that you are show everybody else perhaps that you made a bad decision. Right?   And so sometimes you got to have this checklist to bring you though some cold water on your, your excitement and to say, all right, take it easy here have some cold, hard calculating the questions to ask yourself. And the checklist is like my little computer brain kind of bringing myself back into the rational world.   Michael: It's so good. I know that for me personally, like after I've made that commitment, that emotional commitment, which I am trying to fight tooth and nail every single day, when I'll get probing questions of Hey, what about this? What about that? I find myself getting defensive.   Chad: Yeah.   Michael: And I'm like, wait, this has nothing to do with me. They're asking objective questions about the deal. It's not a reflection of you as a person back off. Yeah. So I know I need to I need to work on that big time. But I think that's great points that you bring up with your closing checklist.   One I'll add from a mistake that I made or almost made is when you receive wiring instructions from the title company, call them and verify the information that you're seeing on your screen is what they sent you. There's been a lot of wire fraud as of late and so somebody could intercept that change the instructions and then you still receive it from the title company. But in reality, you're receiving instructions to wire to Joe Blow in, you know, not the title company. So that's one that I picked up on over the years.   Chad: Absolutely. Yeah, there's a lot of good ones. This is something when you're a network with a purpose, like ask people, what do you do before closing? And then you can add those kind of things to your checklist, because there's so many, so much good wisdom out there from other people.   Michael: Yeah, there really is.   Emil: Chad, do you have a checklist or something people can download on your site? I know you have tons of resources. Is there some where people can go see your checklist?   Chad: Yeah, actually have a free toolkit. Anybody who goes to my website, like if you go to coach Carson comm forward slash newsletter, and you can actually get that on the homepage as well. And it's got my closing checklist. So you can you don't have to reinvent that wheel. If you just want to borrow that and download it. There's also some other stuff like I have a deal worksheet and some spreadsheets and different rental Tenant Screening kind of checklists and things like that. But yeah,   Michael: Awesome.   Chad: If y'all want to put that link in the show notes are something that people feel free to get that free and get downloaded for themselves.   Michael: Fantastic. We'll definitely check that out.   Emil: I might go get that myself can feel like I can always improve. I don't even have a checklist. So get on that you got it.   Michael: You can always expand it even if you glean one thing from every 10 people you chat with or network with or check out I mean, that's time well spent. I think so never stop learning. If you're the smartest person in the room, it's time to find a new room.   Chad: Exactly right. I'm gonna plan on being my last day on earth. I'm gonna be like, adding to my checklist and  learning something new.   Michael: So there we go. Awesome. Well, thanks so much for hanging out with us, man. This was really really great stuff as always enjoyed it.   Chad: Thanks for having me, guys.   Michael: Catch on the next one soon.   All righty, everybody, that was our episode. Thank you so much for listening in a big, big, big thank you again to Chad Carson. Super fun guy. It was a lot of fun to record with him, he’s super gracious with his time. If you haven't checked out Chad's podcast, there's a link to it in the show notes as well. We highly recommend you giving it a look. And we always appreciate rating and reviews wherever it is you listen to your podcast. So thanks so much for listening and happy investing.  

2356 232