Don’t be a ‘Yes’ Man. Be a Smart Real Estate Investor.
You need to know when to say “yes” and “no.”
When you’re a brand new real estate investor or any type of investor you want to say “yes” to every opportunity. Sometimes being a “yes” man isn’t going to be beneficial. Every real estate investor needs to learn how to analyze a real estate investing deal.
If you’re new to the real estate investing game then here’s a list that will help you become an all-star player. If this isn’t your first time, consider this a new addition to your checklist that can only make you become a stronger investor.
These are five keys that will help you evaluate any investment opportunity that can come your way:
1. Risk vs. Reward - Is the investment worth it? Best case vs. worst case scenario? How much value, money or freedom will this investment potentially provide me? Ask yourself all these questions and evaluate. You can even grab a piece of a paper and write it out. Visualizing it on paper might make the decision easier. In the end, if you can’t afford to take on the risk then bail! Sometimes the upside isn’t worth the risk.
2. Calculate your potential ROI (Return on Investment) - This is how I run through three probable ROI scenarios:
- First think about the worst case scenario. What will happen if this barely works? What are the potential returns?
- Visualize what the probable outcome is if you didn’t run into any major issues.
- Decide what the best case scenario is. If everything goes perfectly as planned, what kind of profits am I looking at?
This is how I break it down, and gives me the confidence to pursue potential deals
3. Work with people you trust - This industry is harsh and leverage equals power. So, building those meaningful relationships and surrounding yourself with like-minded, will help you build a power team. If you think you’re doing a deal with someone that you think is untrustworthy, then get out and end that relationship.
4. Understand timing will never be perfect - You don’t want to miss out on a great deal. Perfection is your enemy, and you don’t want to hesitate on something you can make major profits from.
5. Keep emotions out of it - I know it will be hard, but I've seen many new investors get into a bad spot because of making knee-jerk decisions based on emotions. Take everything into account and trust your gut.
This is my checklist that will help you determine if it’s a “yes” or a “no” on any real estate investing deal or any investment that comes your way.
It’s important to remember those involved. Know your risk and those that will be affected, but also know the importance of not letting fear hold you back. Get out of your comfort zone. Playing it safe all the time won’t build a legacy, or even get you toward financial freedom.
Be bold, not only in real estate investing, but all areas of life.
If you want to listen to my entire video covering these five keys then check it out here.