All
Members
Companies
Blog
Forums
Podcast
Webinars
    User Log in  /  Sign up
  • Forums
    Newest Posts Trending Discussions Followed Forums Real Estate News & Current Events General Landlording & Rental Properties Buying & Selling Real Estate Deal Analysis See All
  • Education

    Read

    BiggerPockets Blog BPInsights: Expert Analysis Coronavirus Content & Resources Guides Glossary Reviews Member Blogs

    Watch

    Webinars Video Library Financial Independence Blueprint Intro to Real Estate: Rentals

    Listen

    BiggerPockets Real Estate Podcast BiggerPockets Money Podcast BiggerPockets Business Podcast Real Estate Rookie Podcast Daily Podcast (Audio Blog)

    Topics

    Business Operations Finance Finding Deals Property Management Property Types Strategy
  • Network

    Recommended Vendors

    Real Estate Agents Mortgage Lenders Companies Hard Money Lenders Contractors Investment Companies

    Search

    Members Events Jobs
  • Tools

    Calculators

    Rental Property Fix and Flip BRRRR Rehab Estimator
    Wholesaling Mortgage Payment 70% Rule Airbnb

    Services

    BPInsights: Property Insights Tenant Screening Property Management Lease Agreement Packages

    New Feature

    BPInsights (beta)

    Quickly analyze a property address or ZIP Code to compare your rent in your neighborhood.

    Analyze a property
  • Find Deals
    Real Estate Listings Find Foreclosures External Link Ads, Jobs, and Other
  • Bookstore

    Real Estate Books

    Profit Like The Pros Bidding to Buy See all books

    Featured Book

    BiggerPockets Wealth Magazine book cover
    BiggerPockets Wealth Magazine

    Written by financial journalists and data scientists, get 60+ pages of newsworthy content, expert-driven advice, and data-backed research written in a clear way to help you navigate your tough investment decisions in an ever-changing financial climate! Subscribe today and get the Oct/Nov issue delivered to your door!

    Get the Magazine
  • Pricing
Log In Sign up
User
Quick search links
Podcast Hard Money Lenders Books Washington
BlogArrowPersonal DevelopmentArrowCalling All Real Estate Investors: Can You Answer These 12 Important Questions?
Personal Development

Calling All Real Estate Investors: Can You Answer These 12 Important Questions?

Jeff Brown
Expertise: Personal Development, Personal Finance, Mortgages & Creative Financing, Real Estate News & Commentary, Business Management, Real Estate Investing Basics, Flipping Houses
251 Articles Written
Questions for Investors

The questions I ask folks who’re investing for the purpose of retiring well, change from person to person. Sure, there are all kinds of questions to which everyone should give sober consideration. Let’s look at several of ’em. Some won’t apply to all readers, some will. All require earnest thought. I’m not gonna give answers I often receive or make editorial comments to the questions. It’s a list that’s been singularly effective when eliciting investors’ actual thinking, and more often their comfort level. It’s also far from an all inclusive list.

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

12 Questions That Every Investor Should be Asking Themselves

1.  Where are you now, financially?

  • Cash on hand including checking and savings.
  • Stock ‘n bond investments, in your name and in qualified retirement plans. (401k/IRA)
  • Current pre-tax household income?
  • What have you been able to save consistently, after taxes, on a monthly basis?
  • If you own a home and it has a loan, what are the PITI payments? What's the real life equity if you sold it today and had 8% costs?
  • Do you own any investment real estate? Current value/net equity? Own any notes? What are the particulars?
  • Do you currently own an annuity? What are the specifics?

2.  What are you REALLY lookin’ to achieve in retirement re: monthly income?

  • From what source(s) would that income be generated?

3.  What is your timeline? (How many years to retirement?)

  • Is the time you have to retirement sufficient to accomplish your goals?
  • If so, what are the specific facts giving you the confidence you can make it happen?

4.  Earlier you listed the sources you expect to generate retirement income. What led you to those investments?

5. Why did you choose those investments over others?

6.  Are there potential investments for which you’re comfortable/uncomfortable pursuing? If so, would you please elaborate?

7.  How much of your after tax family budget, if any, would you be comfortable in applying to your overall retirement Plan?

8.  If your timeline is short, a truly relative factor to be sure, are you aware that some investment vehicles won’t be your friends?

9.  Is your household income over $150,000?

  • Did you realize that much income bars you from applying any available depreciation (read: tax shelter) against your ordinary income?
  • Are you aware that doesn’t hafta be a huge negative for ya?

10. Are you and/or your spouse self-employed?

  • If so, does the company have employees other than you and/or your spouse?

11. Are you now contributing to an employer based 401k?

  • Do you have any 401k plans from previous employers?
  • Have you started an IRA? Is it ‘traditional’ or Roth?
  • How much per month are you contributing to any of these?
  • What is your expectation of these plans as it relates to retirement income?

12. Are you confident in the current plan’s ability to produce the income for which you’re planning?

Related: 5 Questions to Ask Yourself Before Investing in Real Estate

The Only Bad Question…

That list isn’t anywhere near complete. Also, as the discussion deepens and the scope widens the questions change. What’s pivotal to a 30-something investor, sometimes isn’t even on the menu of a 50-something investor. Duh, right? The takeaway from this is to ask yourself as many questions as possible, giving brutally honest answers. The question and answer exercise helps to establish a more clearly defined map.

One of the wrong turns made by investors is too many questions going unasked. It’s not that they didn’t wanna answer them, though that’s true in some instances. It’s that they don’t know the questions to ask, or haven’t realized how valuable to their future the answer can be. See for yourself by creating a list of questions to which you must have answers. You’ll notice quickly that your answers will many times lead to even more questions. That’s good!

I’ve learned the only bad question isn’t the one not answered.

It’s the one not asked.  

By Jeff Brown
Licensed since 1969, broker/owner since 1977. Extensively trained and experienced in tax deferred exchanges, and long term retirement planning.
Licensed since 1969, broker/owner since 1977. Extensively trained and experienced in tax deferred exchanges, and long term retirement planning.
Read Less
5 Replies
    Mehran Kamari
    Replied almost 7 years ago
    Wow, great thought-provoking article Jeff! It’s hard to know where you really are and set realistic goals to where you’re going, if you don’t know the answers to these questions. It’s obvious that you’ve helped many people plan their retirement, I can tell! Thanks

    Report Abuse

    Why are you reporting this?

    Additional Comments (optional)

    Cancel
    Sharon Tzib
    Replied almost 7 years ago
    Hey, Jeff! Another great article. I’d love to know the answer to #8. Thanks!
    Jeff Brown
    Replied almost 7 years ago
    Hey Sharon — Thanks so much. If you’re 57 years old and planning to retire at 66, with $100,000 in your checking account, and an equal amount in your Roth IRA, is buying a 1-4 unit residential rental property the best way to go? The answer to that question is usually no, with a few exceptions. One thing for sure is this: Will you be able to pay off the loan on that rental property so the cash flow will be at its max? No? Why would you purposefully engineer a lower retirement income? You wouldn’t, right? On the other hand, even if you could, the same $100,000 would likely be able to produce higher monthly income in notes than real estate. Another reason notes might be a better answer at that age is that there’s a ‘built in’ profit, which will result in an increase in retirement income. Same with the notes the ROTH should be acquiring. Every time a note bought at a handsome discount pays off, the retiree gets a random raise. 🙂 The NOI for the rental, however, might go up, might not. Make sense?
    Sharon Tzib
    Replied almost 7 years ago
    Yes, that makes sense, Jeff. The biggest obstacle I see is the barrier to entry to notes, since as far as I can tell (and please do correct me if I’m wrong – and I know you will wink, wink), you must be an accredited investor to purchase. Even the fictitious person in your example is not. So how does one get into notes if they don’t meet the minimum standards?
    Jeff Brown
    Replied almost 7 years ago
    Sharon — Anybody who can find a note seller, can buy a note. The accredited investor factor comes in when the SEC is involved. My own note fund is under those regs. However, you can still buy notes in the fund, as an ‘outsider’. You need to register as a note buyer at the fund manger’s site. Dave Van Horn’s company, PPR is the fund manager. If you have any questions, feel free to email me and we’ll spend some time going over what’s doable, and how it’s done. It’s not all that hard, really. 🙂

    Report Abuse

    Why are you reporting this?

    Additional Comments (optional)

    Cancel

    Report Abuse

    Why are you reporting this?

    Additional Comments (optional)

    Cancel

    Report Abuse

    Why are you reporting this?

    Additional Comments (optional)

    Cancel

    Report Abuse

    Why are you reporting this?

    Additional Comments (optional)

    Cancel
Rotate Log in or sign up to comment

Related Blog Posts

Personal Development Jan 06, 2021

Why Some People Will Never Succeed (& Others Always Will)

By Steve Rozenberg

It’s a common error, but one that’s easy to correct. Look forward, rather than back, to set yourself up for success in business and in life.

Read more →

Personal Development Dec 18, 2020

Analysis Paralysis Is Costing You More Than You Think

By Marcus Maloney

Did you achieve everything you wanted to this year? If not, this one significant factor faced by newbies and pros alike may be to blame.

Read more →

Personal Development Dec 11, 2020

The No. 1 Thing You Can Do To Improve Everything in Your Life (Bonus: It’s Ridiculously Easy!)

By Andrew Syrios

The one thing we can all do to improve our skills is the one thing we seem to almost intentionally deprive ourselves of.

Read more →

Personal Development Dec 07, 2020

12 Gifts for Real Estate Investors (That Don’t Suck)

By G. Brian Davis

Ditch boring gift ideas, and try something a little more personalized this holiday season—something befitting the real estate investor you’re shopping for.

Read more →
Log in Sign up

Log in

Forgot password?

If you signed up for BiggerPockets via Facebook, you can log in with just one click!

Log in with Facebook

Or
btn_google_dark_normal_ios Created with Sketch. Continue with Google

Let's get started

We just need a few details to get you set up and ready to go!

Use your real name

Use at least 8 characters. Using a phrase of random words (like: paper Dog team blue) is secure and easy to remember.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.

Or
btn_google_dark_normal_ios Created with Sketch. Continue with Google

Why create an account?

Receive a free digital download of The Ultimate Beginner's Guide to Real Estate Investing.

Connect with 1,000,000+ real estate investors!

Find local real estate meetups and events in your area.

Start analyzing real estate properties, we do the math for you.

It's free!

Explore

  • Membership
  • Community
  • Education
  • Marketplace
  • Tools
  • FilePlace
  • REI Resources
  • Perks
  • Glossary
  • Reviews
  • iOS App
  • Android App

Company

  • About Us
  • Press
  • Advertising
  • Careers
  • Stats
  • Contact Us

Important

  • Editorial Guidelines
  • Terms of Use
  • Rules
  • Privacy
  • FAQ

Social

  • Facebook
  • Twitter
  • YouTube
  • Instagram
© 2004-2021 BiggerPockets, LLC. All Rights Reserved.