Mentor 6- Cost of Failure

[Henry Clark]

Most of you will never make an REI investment due to the "imagined" Cost of failure.

Spreadsheet success looks great, but not quantifying failure makes you assume the worst.

After you have done about 5 deal analysis want you to calculate your Cost of Failure.  

Change your assumptions by steps.

1.  Cost overruns

2. Capex issues

3.  1% point interest increases

4.  Death

5.  Property tax increases

6.  Missed rental payments. 1 month, 2 months. Etc.

Take imagines failure and out a number to it.     

Start small and Make Your Big Mistakes Early.