Have you heard of any friends getting burned on an investment deal?

We have and it's always unfortunate to hear. To help combat risk, we've thrown together some examples of the best ways to vet out bad real estate deals when you come across them—that way you don’t get burned too!

These steps apply to all asset classes, residential, multifamily, etc.

STEP 1 - Know Population Growth

How: Google “population [City], [State]”

What’s Good: Aim for 20% pop growth between 2000 and 2019 (for cities between a quarter-million and 1 mill in pop.)

Example: Provo = 34.45% growth since 1990

STEP 2 - Know Median Household Income Growth

How: Search for the city on city-data.com

What’s Good: Aim for 30% growth between 2000 and 2016

Example: Provo = 36.63% growth since 2000

STEP 3 - Know Median House/Condo Value Growth

How: Search for the city on city-data.com

What’s Good: Aim for 40% growth between 2000 and 2016

Example: Provo = 71.57% growth since 2000

STEP 4 - Know Change in Crime Levels

How: Search for the city on city-data.com; scroll down to the crime table

What’s Good: Look for crime to go down and for the most recent crime number to be below 500 (Crime is directly tied to delinquencies/evictions)

Example: Provo = 205.7 in 2002 down to 166.1 in 2016

STEP 5 - Know 12 Month Job Growth %

How: Search for the city/metro on deptofnumbers.com/employment/metros

What’s Good: Look for numbers above 2% annualized job growth (1.5% for cities over a million)

Example: Provo = 3.65% Increase