I’m based in Coastal South Florida where cap rates and insurance costs have gotten tough — plus hurricane risk doesn’t help.

When doing due diligence to create a healthy investment portfolio, every investor will do it differently because every investor has a different risk tolerance, comes from a different financial situation and has different financial goals.

I’m trying to understand the full process and potential risks before making a move, so any personal experiences, advice, or recommended resources would be greatly appreciated.Thanks in advance! 

To see deals in real time around LA, plug into investor meetups and site visits: pick two groups this month, show up early, ask who’s walking rehabs this week, and offer to carry a clipboard and ask smart, brief questions.

The Deal: • Single-Family Fix & Flip in the Midwest • Purchase Price: $250,000 • Rehab Budget: $50,000 • ARV: $375,000 The Funding Structure: • Loan Covered: 90% of purchase + 100% of rehab • Total Loan: $275,000 (capped at 75% of ARV) • Term: 12 months, interest-only payments • Closing Timeline: 10 business days Client Cash to Close: • 10% down on purchase = $25,000 • Closing costs + points ≈ $8,500 • Legal/Appraisal Fees ≈ $1,500 • Total ≈ $35,000 Out of Pocket Monthly Carry: • ~$2,520 interest-only payment (plus taxes/insurance) Exit Projection: • ARV: $375,000 • Loan Payoff: $275,000 • Selling Costs (~8%): $30,000 • Net Profit ≈ $55,000+ For this client, we made sure the financing aligned with their exit strategy so they could move quickly on the property and keep more capital free for future deals. 

The second risk in my opinion is the title and the type of deed some auctions provide.

First floor condos will be at the highest risk of flooding.

Things like preferred returns, equity splits, management fees, and exit timelines vary widely, and they can make a huge difference in your risk and return.Third, assess your own goals and capital availability.

Even smaller multifamily or single-family rentals can unlock big upfront write-offs that boost cash flow now instead of over 27.5 years.Also, make sure to review passive activity loss limits, if you or your spouse qualify as a Real Estate Professional, you could deduct rental losses against other income instead of carrying them forward.

All of them carry tax issues - either now or in the future.