Real estate is a people business, but will ultimately always come down to the numbers. For the new investor, and especially one who doesn’t think much of their math skills, this can be a daunting proposition. I remember thinking this way a long time ago and, for every investor, overcoming this obstacle is both essential and unique in how you get the job done. For some, simple repetition and doing numbers time and time again is what helps the process sink in. For others, use of simple formulas for different situations is a path to success in number crunching. However you see this part of the business playing out for you, make the commitment to get comfortable with running numbers because your business depends on it.

All that said, I have a few tips and suggestions that I think will help you become more comfortable with this part of the business. First, don’t over-complicate it. Too many investors crunch numbers with the perpetual fear that they are missing something important. Remember my discussion on “paralysis of analysis?” If this is holding you back, estimate costs conservatively and evaluate deals under ‘worst case scenario’ conditions. That way, you’ll feel more comfortable with what you come up with and you’ll be able to proceed more confidently. Another way to feel more confident with number crunching is to realize that you only need to run a crude set of numbers before making offers on properties. You have plenty of due diligence time after a contract is signed to check your calculations and make adjustments as necessary so don’t feel like you have to be right on the mark from Day One.

Additionally, only go after the low hanging fruit. For example, if you went to pick an apple to eat from a tree you wouldn’t climb the tree and pick the apple at the top. Rather, you would pick the apple closest to your reach. Same thing holds true for real estate deals. I would much rather you weed through a hundred non-deals to find the good deal rather than trying to stretch a non-deal into a deal. Being willing to walk away is just as important as being able to take action. Lastly, always set yourself up to make good money with bad numbers. Murphy lives everywhere, and if something bad can happen it very likely will happen. This is not a big deal, just prepare for it in the beginning.

If you attempt a deal where the numbers must align perfectly then this is a deal you should walk away from. Always have a comfortable cushion so that you can make good money with bad numbers. Don’t stress my friends, you’ll develop these skills as you continue to learn and grow, and remember that your ability to do this will produce more profitability for your operation.