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Real Estate What constitutes homework?

Discussion in 'Real Estate Investing' started by lee_mre, Sep 18, 2007.

  1. lee_mre
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    lee_mre PARKED

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    I constantly see a lot of "Do your howework" "Due diligence". What do you do to "do YOUR homework"?

    I assume its more than simply crunching number, though I suspect it starts there? What else do you check? Where do you find your information?

    I'm sure alot of us noobs would love to learn from some seasoned investors.

    Thanks
     
  2. Runum
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    Runum Platinum Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass Summit Attendee

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    I agree. It's doing your numbers. Doing the right numbers. Understanding the numbers. Asking questions. Asking the right questions. Understanding the answers you receive. Covering your.... bases. :cheers:

    Greg
     
  3. SteveO
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    SteveO Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    There is a lot of information that would go into defining "homework". One aspect would be with determining locations (metros) to purchase in. It would take a book or perhaps a minimum of a chapter to define this.

    Due diligence on the other hand is understanding the investment. Again, it is a long list. There are a lot of resources that have been dedicated toward this topic. They can be found online or in many different real estate books.
     
  4. lee_mre
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    lee_mre PARKED

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    Thanks SteveO. I find it interesting that you make a difference between homework and due diligence. Sometimes I hear both terms used almose interchangably.

    I would appreciate it if you could explain the nuanced difference between the two and how it would relate to finding/buying propery.
     
  5. SteveO
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    SteveO Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    They really are interchangable. Just my opinion but, homework is done prior to going under contract and due diligence is usually performed while you are in contract. Some of the initial homework is dd though and it all could be though of as dd.

    Clearer now? :smx6:
     
  6. lee_mre
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    lee_mre PARKED

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    Much clearer :thumbsup:
     
  7. JScott
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    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    It's just like in school...

    Homework = Homework
    Due Diligence = Test

    Homework is where you study and you learn, and it's okay to get some answers wrong. Due Diligence is the test, and there's no room for wrong answers there...
     
  8. Runum
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    Runum Platinum Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass Summit Attendee

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    Cool answer. Never thought of it like that.:thumbsup:

    Greg
     
  9. KyJoe
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    KyJoe New Contributor

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    I like to make sure the area is good around what ever property. It's good to really look at the neighboring properties, what you see is pretty much how it will be. I make sure to look around at night. Try to find out how much money other buildings in the area are selling for, not just the asking price. Look in the paper and find out what the rents are.
     

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