The Conservative Investor's Guide to Picking Real Estate Investments: Part 3 - Property Basics.
Updated: Oct 25, 2020
Property-level due diligence basics: "pro-forma popping," sensitivity analysis, and "stall and see"
(Usual disclaimer: I'm just an investor expressing my personal opinion and not a financial advisor, attorney or accountant. Consult your own financial professionals before making any financial decisions. Code of Ethics: We do not accept any money from any sponsor or platform for anything, including postings, reviews, referring investors, affiliate leads or advertising. Nor do we negotiate special terms for ourselves in the club above what we negotiate for the benefit of members.). IMPORTANT COVID-19 UPDATE: this info was posted before anyone knew we would be facing a global pandemic in the spring of 2020. So it may be missing crucial information necessary to making an effective investment today. Some of the information in it may be dated, no longer accurate and/or irrelevant. For information on analyzing investments in this new era, see: "How will Covid-19 / Coronavirus Affect my Alternative Investment Portfolio?"
This is a 4-part article series on how I pick conservative real estate investments for my portfolio. There are many ways to do due diligence, and I've come up with a process that I like for myself. My process is ruthless and starts with thousands of deals in my inbox each year. In the end, maybe 2 to 4 per year survive that I invest in. This series details exactly what I look at and why. I welcome the feedback of other conservative investors, and will add ideas I like to the articles. And aggressive investors should also find this helps them better appreciate and gauge the bigger risks they end up taking. (If you're a non-accredited investor, a lot of this info doesn't apply to you. Check out this non-accredited investor guide instead).