Real Estate Investment-5
As mentioned in the previous part of the series, your calculator won’t help here. This is when you need to take a look in the mirror and think about how much time and effort you’re going to be able to devote to the project.
Again, let’s look at the project that you’re comparing against a similar opportunity; another multi-family in the same neighborhood but which requires less work. You’d take that opportunity over the fixer-upper unless the second one offered a considerably higher rate of return. But how much higher?
To starting investors the logical advice is not to err on the side of caution. A project that you can get done is infinitely better than one that has you burned out by the time you’re halfway through it. Find something in your comfort range that offers some decent numbers, get it done, then move on to a more challenging (and hopefully more profitable) project the next time around.
