How does one define their "criteria"?

[Chris Shelton]

Hey BP! So I've been going through the podcasts and the books which are an amazing wealth of information obviously. However, one of the first steps everyone is saying is to start analyzing properties and more or less go after the ones which "meet your criteria". What sources are there that will assist someone in defining what their "criteria" would be? 

Thank you all for your time!

[Alecia Loveless]

@Chris Shelton For me it was a matter of personal preference which has evolved as time has passed. I chose REI because I had nothing saved for retirement and my parents made a lot of money at it.

A duplex presented itself and through years of blogs, podcasts, research during the dark ages if anyone remembers Carlton Sheets, and I cunningly took advantage of the Sellers weak points and stole the deal at a great price.

Then my Realtor presented me with a great SFH. It has turned into a flip.

I realized I had to expand faster and began scouring the MLS for another deal. I happened to look outside my preferred area and found a 4plex. This was in December. It is true great deals can be made/found in December. I've had great luck.

My realtor told me about a listing he was working. He showed it to me and I made a full price offer before it went on the MLS. After the inspection I lowered my offer by $100,000 and the Seller accepted.

My criteria started out as getting into the game with no real end point other than to have enough money to retire. Now it’s 3-4 units(my area doesn’t really have much larger) that either don’t need a lot of work or I can buy for a huge bargain. My goal is to acquire 30 more units by my 50th birthday in about 3.5 years. Last night, 2 years in, I sat down with a note pad and calculator Andrea figured out exactly what my expenses were and would be going forward and how much I’d need to make passively each month for both myself and my wife to quit our W-2 jobs and be comfortable.

Defining your criteria may include things like do you want to manage a small local portfolio yourself, or plan to allocate 10% and hire a property management company? Or would you rather invest in a REIT and be totally passive? Or are you an accredited investor and you want to invest in someone's large scale syndicated deal?

I’d recommend sitting down with a pen and paper and first think about your why. Why you want to invest in real estate. Then think about your how. How you’d like to accomplish it that best fits in with your goals, lifestyle, and family. Then you can think about your criteria whether it’s for property you want to own, REITs you want to investigate, if you want to wholesale, do flips, etc.

You can always change your goals and grow your plan as you begin and learn and evolve.