331: REI "Not All Real Estate is Created Equal".

Stress test for buying real estate: 1. Does it provide cash flow with at least 4-8% a year (if it provides more than 8% you need to look with some magnifying glass cause there is probably something wrong!) 2. Time/money - is this going to be worth your time? 3. Do you love it? 4. Can you exit? Can sell the deal at any time? If a deal makes 28% but that’s only $100 that’s not a good deal. How many doors/units/tenants you have is the most important number in real estate. Classes of properties: A - (could be triple A) new or 1-3 years old B - 3-20 years old caters to mix of white and blue collar, overall nice mix of cashflow and appreciation, returns of 5-7% before appreciation C - 20 + years old D - Inner city, tough markets