101 Best Practices... Of Successful Real Estate Investors...

For those who have been in the business world prior to becoming real estate investors I am sure you have heard of the term Best Practice.  It is commonly used in business to refer to a practice that has become the defacto standard learned from the efforts and at the expense of other businesses.

With that in mind, I have been compiling a set of "best practices" that based on my experiences and observations represent the "standard" for successful real estate investors.

I will be posting a couple of these best practices to my blog over the next several days.  Your thoughs and comments would be appreciated.

Establishing Effective Purchasing Criteria

 If a deal sat down beside you... right this moment,

would you know that it was a deal… for you?

When I ask this question during my seminars I am always surprised at the number of people who have no idea what constitutes a good deal for them.

This "best practice" will not show you how to evaluate a deal… but it is intended to help you to take the emotion out of making that determination, and of course these criteria should support your vision and the goals you have established to complete that vision.

Here is what I have found… many real estate investors get too emotionally involved with their deals.  I don't believe that this works to their best advantage.  The bottom line is that this is a numbers game… and the last I checked numbers don't have emotions!

Every successful real estate investor I have ever worked with had a set of criteria to help guide them through their deal evaluations.  These criteria can be as simple as…

1.      Net monthly cash-flow of $150 per unit, or

2.      Renovation time could not exceed 6 weeks, or

3.      Property must be in specific Zip Code, or

4.      The renovation cost could not exceed $45K, or

5.      The minimum profit had to be $35K.

I think you get the picture.

While these criteria do not have to be complex, for rental properties I only have 4 criteria, once they are established, you need to follow them.  That means that once you spend some time determining what a good deal looks like to you… don't start changing the criteria to match the deal.  You will regret it!