How do you mitigate risk in your investments?

[Diego Martinez]

I'd like to gain a deeper understanding into the key factors investors consider before committing to an investment property. I understand that some investors take a more conservative approach than others. What criteria do you use to determine whether a deal is worth pursuing?

[Alecia Loveless]

@Diego Martinez My main criteria is that if it's a multi it must have pure cash flow of at least $200/unit after all expenses. This includes a percentage saved for CapEx, repairs and maintenance and Vacancy. If it's a SFH I'm looking for pure cash flow of at least around $600/month.

Most of my buildings include an owners account and monthly expense for electricity and about half of them also have a trash charge monthly. If you live where there is curb side trash pickup this cost is probably included with your taxes or fees from the city. But if not it can easily be between $150-$250/month which can really eat into your cash flow if you didn’t underwrite for this expense.