How to Determine Your Bottom Line

As an investor you must determine your bottom line to do a deal. What is the profit you would expect, minimally, to do a deal on a lease with option to buy or Subject to investing technique? For each type of investing technique you might have a different profit amount required. For instance, I will accept less for a rehab than a lease option, because it can be completed and out of the deal within a few months, whereas a lease option I will be in the deal for 12-18 months or more. Is your profit range for a deal $10,000, $50,000 or $300,000? Once you determine your bottom line then you can determine what you will and will not do for a deal. For instance, if your bottom line is $20,000, and a deal comes along that will only provide you with $18,000, then you need to pass that deal up, or negotiate more to get you your bottom line, otherwise, it is not be a win/win with the seller and yourself. You also might be able to wholesale it to someone else who has a bottom line that is less than your bottom line, but you will need to learn to walk away from deals that don’t work for you.

To learn more about determining your bottom line take a look at my book Investing in Real Estate with Lease Options and Subject-to Deals.

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