When it comes to real estate investing, it’s important not to become emotionally involved in a deal. You should have a checklist to make sure you’ve properly gone through all contingencies and are fully confident the deal will perform as you anticipate it will.
Here are 10 things you should consider for every deal.
1. Don’t over leverage the property. Borrowing money to purchase and improve a property is a good strategy. Just don’t over do it. Two things happen when you over leverage a property. You may not have adequate financial reserves to take care of any unexpected problems that come along. Also, it costs money to borrow money. It will eat into your profit.
2. Be conservative in your cost estimates and schedule. It almost always costs more and takes longer than you think it will. Especially if you don’t have a lot of experience with real estate or a particular type of deal. Be conservative when estimating costs and schedules and then add another 20%. The bright spot here is that when you come in under budget and ahead of schedule, the extra money goes in your pocket.