Adopt a 'Why I Shouldn’t do this Real Estate Deal' Attitude

- Custom home located on 3 acres of forest land
- Appraised Value at $1.8 million
- Purchase price $1.3 million
- Move-in ready condition
- Owner will carry with 20% down
Michelle gave me a little more information about the area and then asked for my thoughts. I told her I didn’t have any thoughts. However, I did have several questions:
- What’s your exit strategy?
- What kind of ROI do you want?
- How long will it take you to sell this house?
- If you had to sell the house FAST what would the sales price be?
It turns out Michelle didn’t really have an exit strategy in mind. She may live it the house for a few years and then sell it. Or, she could flip it. She hadn’t given much thought about an ROI but she was supremely confident the house would sell in about 9 months. Michelle was also very certain the home could be sold quickly for $1.3 million. Ugh. When presented with any real estate investment opportunity I always try talking myself out of the deal. Michelle was doing the opposite. Most of her desire to do this deal came from the fact that the . Great I told her. But without a clear exit strategy the terms are irrelevant. What really concerned me was the acquisition price. Michelle said the home would sell fast for $1.3 million and that it’s in move-in ready condition. So if she decides to flip the house quickly she’d be paying full market value.