Well, let’s just see about that…

Last week I received a phone call on some foreclosure deals here in the metro Detroit area. It was a good tip and I responded quickly (you have to in this market!) As I screened out these properties, the numbers machine in my brain started working:

• Was the buy price correct?
• What were the exit strategies?
• What were the risks?

And so on. Kind of like a computer program that runs each time you press a button, my investing brain kicks in when I see deals that I like. I mentally picture which private money I’m going to place in the deal and how the cash will flow from A to B to C.

This is the fun part of real estate investing.

As I broke the deal numbers down, the numbers looked marginal at first (meaning everything would have to go right in order for me to make my required return as well as pay my private money investors back) and as I looked closer at all the details, I began to see that these few properties weren’t going to work at all for me.

I called the guy back who had sent these deals to me and told him that I was going to have to pass on this one. Why did I pass on what originally seemed like such a good deal?

Here’s what I was looking at: Read More→