During my lifetime I came across many real estate investors. Many had little to no experience (wannabe’s), a few who had some experience and very few who had experienced a lot and learned a lot.
I also noticed the difference between those seasoned ones and the rest. One of the things the pros always do is to work off of “worst case scenarios” calculations. For example, when in a position to estimate expenses to determine the NOI (Net Operating Income) when actual figures are not available, the successful real estate investor will use a higher percentage than the standard one. On a newly renovated building the typical estimated percentage is 40% – 45% but the pro will add room for the “unknown” thus his expense percentage will now turn into a 50% and the NOI to a lower figure.
The cushion of 5% to 10% can make the difference between a good deal and a seriously bad one. If the “unknown” happens he knows that his investment is covered.
So, tell me, do you instantly recognize the value in this phenomenal opportunity available for a Price of Only $87,500, with a 57% ROI (without financing), whereas it would take a Pro about two years to recoup his money?