My Real Estate Criteria and Rules for Success

This is going to be an ongoing list as I learn more and incorporate lessons learned from my experiences. I have a mental criteria for every deal, but I think it’s time for me to write it down. This list isn’t in order of priority.

Rule #1: Never work with someone you can’t trust or says “You have to trust me on this one.”

Rule #2: If the deal is not better than this formula, skip it! (Gross Annual rents *50%) / (Purchase price + any repairs )= > 20%

Rule #3: Go into every deal as if you’re going to pay cash and will never sell.

Rule #4: Master a niche before moving towards another type of real estate deal. Remember there is a learning curve to everything.

Rule #5: Be patient, you make money when you buy not when you sell.

Rule #6: Don’t be scared to fire someone.

Rule #7: Always get approval from your wife/family before moving forward. If you can’t convince your wife, you haven’t done enough research.

Rule #8: Do not allow your tenants to have pets. They will destroy your property. If you allow pets, charge an expensive monthly pet fee.

Rule #9: Buy all properties within your trust.

Rule #10: Keep your properties in excellent condition, slum lords are assholes.

Rule #11: Always ask why is the seller selling the property.

Rule #12: Trust your network. If you can’t trust them, get rid of them.

Rule #13: All investments must be 100% passive, money is not important enough to take away from you family.

Rule #14: Always think in the number of units you have.

Rule #15: Aim to buy 3 properties per year.

 

If you’re interested in how I spend less than 1 hour a month on real estate and make bigger gains than the stock market, check out my one vs one mentoring. I give you my blueprint and my time tested method, kind of like a franchise, when you click here.

0 comments

  • Hhhmmm, very interesting rules and I can safely say, its always great to read from someone who has been there and has tonnes of experience. From a renter’s perspective I’d take issue with rule #8 on pets…I like pets 🙂
    Am curious about rule #13, how do you make all your investments 100% passive?

  • Simon,

    Great question! I built my real estate business to “work” with no more than 30 minutes per month of my time regardless of the number of properties I have. I have a lawyer, real estate agent, property manager and lawn mower who handle 99% of the work. All I do is tell them what to do and review monthly statements. Now, they know my requirements and standards, so they tend to handle issues before I need too.

  • Olu /

    Interesting. I had the same thought as #8 but was informed that it would be considered housing discrimination here. Maybe it’s a state by state thing.

    Can you elaborate on #9.

  • I don’t think it would be housing discrimination. There are apartments that say “no pets allowed”. I purchase all properties within a Land Trust that has my LLC as the beneficiary. to quote Mr. Landlord ”

    A Land Trust is a simple inexpensive method for hiding the ownership of real property. A land trust can be setup as an irrevocable living trust used to title ownership of real estate. Title to the property is held in the name of a trustee, who is forbidden to reveal the beneficial owner. The beneficial owner or “beneficiary” can be an individual, corporation or other entity for further protection. The Land Trust is an amazing device which offers numerous benefits to rental property owners. The two reasons it is not used by every real estate investor are that few know much about it and those who know about it do not know where to obtain land trust services at a reasonable cost.”

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