Real Estate is Like Dating

[Jason Malabute]

It might sound funny but I genuinely believe that Real Estate investing is like dating. The reason is that you need to have criteria for both of these, and you should never break those criteria; no matter what!

In dating, you would rather remain single than be with someone who drains all your energy (and resources). Wouldn’t you? Similarly, it is better to have no deal than a bad deal in real estate! Having a well-defined criterion will save you from getting into a bad deal in real estate. So, how do you formulate the criteria?

Well-defined criteria must have a firm count of the following factors:

• Unit count
• Location (Neighborhood Grade)
• Year built
• ROI
• Rehab Scope Needed
• Occupancy
• Unit Mix

For instance, I have the following set parameters in my criteria and I never deviate from it (no matter what!):

• Unit count = 8-30 units
• Location (Neighborhood Grade): B or C+ Neighborhood
• Year built: Between 1960-2000 (Preferably 1980 or newer)
• ROI: 7% Cash on ROI
• Rehab Scope Needed: A maximum of $9,000 Interior Rehab
• Occupancy: 85% Occupancy (Minimum)
• Unit Mix: 1 Bedroom unit shouldn’t contribute to more than 50% of total units

Conclusively, sticking to your criteria mitigates the downsides!

Fun Fact: I always tell people that I would like my woman to be like my real estate. Built-in 1980s or newer, stay in suburbs, and comes with no headaches!