Question: Perhaps every property problem is fixable in some form or fashion, but always ask yourself – “is it worth it?” How does the savvy real estate investor evaluate when the answer should be “no”?

Answer: The “problem” itself is not what matters, or whether you think it is a “big” or “small” problem. Learn the simple wisdom of always focusing on the big picture: the effect on the project’s profitability.

Of course you can’t duck every big issue and stay in this business! There are plenty of profits to be made on a property problem, if you can use it to negotiate the initial purchase price down radically because of the very big, really bad, terribly scary problem.

That’s really the crux of your decision about going ahead with a big sticky problem – do you have the way to fix it on hand, and the resources to cover all of the costs, including any extra carrying costs if the house isn’t ready to sell per the project timeline?

Beware of any problem that can cause more problems, such as …

• Trash Your Timeline
  Can this project survive an extra month (or two or more) of cash obligations to lenders, utilities, insurance, lawn maintenance, security? The goal is to sell this cash-devouring beast before it consumes the profit. You can blow up the financial plan if you are stuck with hundreds or thousands in extra carrying costs.

• Bottomless Well of Cost
  Do you really want to find out what lies beneath if you must remove sheetrock, or do major chimney work, or pull up the roof tile? If you have to peel back a layer that normally stays intact, you may find more expensive problems under the surface.

• Where is Good Help When You Need It?
  It can be fixed – but the best people for the job are: (pick one or more) committed to another project; out-of-town or on vacation; unreliable about deadlines; and so on. Don’t yoke yourself to an anchor when what you need are wings.

And the last and most crucial criteria … 

• Know Your Limits
  Listen to your gut when it comes to what you can handle, and what is best passed along to another investor who has the chops for this deal-breaker. Do you have the wherewithal for this knotty issue? If so, is this the right time to take it on?

Don’t shy away from every challenge, because a little pain is how we learn and build skills. Develop your own wisdom for deciding which problems you can fix profitably, and which are just not a fit for your goals and/or your resources. 

Don’t fall in love with a property that will eat up your profits! Think of yourself as being at a bus stop: Another one will come along soon enough.

What is a problem you are willing to tackle? What is a problem you wouldn’t touch with a ten-foot pole?

Request a FREE one-on-one Investor Aptitude Assessment with an experienced, real-world real estate investor. Visit http://www.streetwisepropertyinvesting.com/coaching/.