• If you are doing a deal with someone else and will be in a Joint Venture/Partnership, who is that person? What is their exact experience and long term results? What is their experitise? What exactly will the roles in the JV/deal be and what happens if they do not do this? What will be expected of you?
• Check and double check the numbers, particularly reserve cash required and vacancy rates. In particular, with low income housing, you have very likely underestimated the reserve cash needed and the vacancy rates you will have.
• Real Estate is not and never was meant to be a ‘get rich quick’ system. If you want/need that – try stocks, startups or options. Often, Real Estate will not cash flow as you expect or theoretically calculate, particularly in the case of single family homes where rents have not kept up with house prices (hence mortgages required) and real estate taxes.

Hope this brief list helps!

Unfortunately, some of the opportunities were seen by get-rich-quick-schemers as a way of quickly producing massive profits from real estate. An example is the many ‘no down payment’ loans done for ‘investing’ early on before the banks and mortgage lenders started clamping down on this. Soon, investors found themselves with debts higher than the value of the properties as property values dropped due to the number of foreclosures. This caused investors to default and foreclose, causing a vicious cycle.

As with all investing, keep the following in mind:

• If the opportunity seems too good to be true, it likely is.
• Are the numbers and forecasts in a real estate investment deal conservative, particularly with regards to required reserve cash and vacancy rates?
• Is the opportunity seen as a long term, solid growth investment, or a quick ‘cash grab’?
• Real Estate, historically is a long, solid (but often) slow investment vehicle. It has historically averaged less Return on Investment (ROI) than say stocks due to the perceived and generally actual, reduced risk compared to stocks.