I am a new investor and I am in the process of purchasing a property with my Heloc (7.75% fixed for 60 mo).

Real estate investors rely on cap rates to analyze deals and compare potential returns before making a purchase.🔍 Understanding Cap Rate:- On the surface, the cap rate is one of the best ways to determine whether a deal is worth pursuing.

After researching it a little bit I can see how its not for new investors, there seems to be a few extra ways to get burned on an auction purchase.  

Purchase price: $170,000 Cash invested: $150,000 Renovation and hold plan.

Well, excluding the single family home that I am planning to rent out in NC in the next week which started as my primary home, this truly is my first multifamily home purchase with an intent to invest.Now, to answer your question, is it wise?

They told us the price of the renovations would be included in the purchase of the home and we were nieve enoough to believe them. 

Why do you think purchase contracts are so long and have such small print?

Purchase price: $196,000 Cash invested: $42,000 Sale price: $369,000 Contributors: Peter Vekselman Partner Driven, in collaboration with Seth Choate, successfully completed a deal on Pine Cone Way, Mountain Ranch, CA.

Purchase price: $158,000 Sale price: $200,000 Contributors: Peter Vekselman Partner Driven, in collaboration with Kim Morris, successfully completed a deal on Devon Drive, Albany, GA.

There certainly is a "no fly zone" for purchasing, and criteria that should be followed for a sound investment opportunity.