Deal evaluation is the key to your success as a real estate investor. Once you’ve got the basics of deal evaluation down - once you know what all of your options look like in terms of financing, renting the property out or turning over the sale - it becomes a lot easier to make the choices that will help you to succeed in your business.
Most importantly, however, you will find that deal evaluation allows you to eliminate a great deal of risk up front - before you spend and money on a property and before you run the risk of making a deal that isn’t anywhere near as good as it seems.
Deal evaluation is about understanding whether or not you’re getting the best price, about whether or not you are choosing the right financing options, about whether or not you are investing in a property that’s in the right market based on the trends. Deal evaluation is about taking the time to do your due diligence and to make sure that you’re seeing the big picture of what a deal is.
By taking the time to research all of your options and to evaluate the deal based on a number of different variables, you will find that you are able to approach the deals that you’re thinking about making with confidence. You will be able to know up front whether or not an investment is going to help you to reach your business goals and, more importantly, you’ll find that you are able to eliminate risk and to avoid bad deals before they are made.
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June 11th, 2008 at 12:01 pm
This is why I am a big believer in sticking to one investing method, and trying to stick to just a few geographical areas. For example, if you are stricktly a wholesaler, and you stick to buying houses in one or two neighborhoods… then you will not only have a system down for finding your deals, but also have an intimate knowledge of what properties are worth, and what you can pay for them to make them work. And if you stick to the same strategy your systems can be automated so you can build momentum and in return build wealth.