Dani Lynn Robison breaks down real estate deals into three corners: the team's track record, the location's market strength, and the deal structure including debt levels. Check them in that order before looking at projected returns.
Before you put money into any real estate deal, there are 3 things you need to check, and most people only check one, and it's not even the most important one. Think of every deal as a triangle, 3 corners. If one corner is weak, the whole thing falls apart. Corner 1 is the team. Who's running this? Do they have a track record? Have they done this before and paid investors? Corner 2 is the location. Is the market growing or shrinking? Are people moving to this city or away from it? Is there demand for what this property offers? And corner 3, the deal structure. How is it set up? Is there too much debt? Is the plan realistic? What happens if things go sideways? If all 3 are solid, then you look at the projected numbers. Most people skip straight to the returns. That's backwards. Team, location, structure, in that order. And if all 3 pass, now you talk numbers.
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