Embark on the ‘Heuristics’ section, a strategic journey through fundamental rules in real estate investing. Explore essential courses like the ‘1% Rule,’ ‘2% Rule,’ ‘50% Rule,’ and ‘70% Rule.’ Each lesson unveils heuristic principles guiding investors in determining purchase prices, managing expenses, and mitigating risks. Start with this section to navigate these key heuristics, empowering you with practical insights for informed and successful real estate decision-making.
Welcome to the next section, Heuristics.
In this section, we’re going to be covering a multitude of various heuristics that I like to use during real estate evaluations. The definition of a heuristic is simply a mental shortcut that allows you to solve problems easier. Since there can be a lot of math involved with rental property analysis, I found over the years that these heuristics allow us to find an answer or solution faster with back-of-the-napkin math, as opposed to running everything through an actual calculator.
Now, I highlight this again inside the lessons themselves, but it’s important to remember that there are some simple tricks that can be used to help guide us to get an answer quickly, but shouldn’t be used all by themselves. They are simply an ingredient to be added to our overall recipe.
To use a baking analogy, think of these like vanilla extract. When added to a recipe, it can really enhance the flavor beautifully, but if it’s tasted just on its own, it’s not so great. So keep these in your mind as you’re going through your evaluation of various deals. And hopefully, they can help you come to a conclusion about the needed next steps faster and more confidently. Especially if you’re someone that’s not a big fan of math.
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