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The DFY Blog

The Single Most Important Number In Real Estate Investing

Posted by Kevin Clayson Monday, 27 July, 2020
The Single Most Important Number In Real Estate Investing with Kevin Clayson and Steave Earl


We’re huge advocates of using data to estimate real estate opportunities. Looking at numbers is a large chunk of what we do, and it plays a crucial role in how we make the right call.


But it’s also incredibly important to know exactly which numbers to look at. If someone is cherry-picking data, then their estimate is irrelevant.


There are a billion ways to look at the numbers. And if they seem too good to be true, there’s a good chance someone carefully presented them to look that way.


Kevin Clayson Quote on Understanding the Numbers


Every real estate investor needs a system for looking at data and a standardized set of numbers they focus on.


When we make estimates, we use a special, Done For You pro forma. It has proved to be a reliable tool over the years, and it allows us to analyze properties very quickly.


If you go to our website and check out our pro forma, you’ll see a bunch of numbers on it. Each of them tells a portion of the story, but some are definitely more valuable than others.


In today’s episode, we’re going to unveil what we think is the single most important number for assessing real estate investing opportunities.


We’re also going to break down our pro forma, explore various other dependable metrics, and talk about how it all ties into our idea of income replacement.


Key Takeaways

  • The backstory of picking today’s topic (2:29)
  • Most common numbers people consider when looking at investment properties (7:19)
  • The crucial components of our Done For You pro forma (9:17)
  • Why are we such strong advocates of the 25% down payment? (10:59)
  • How do we make money? (12:30)
  • Why you need to know which numbers to look at (15:15)
  • Our conservative approach for looking at numbers (18:01)
  • When is 2+2 not a 4? (22:08)
  • What makes Cash-On-Cash Return a valuable metric? (22:43)
  • Things you can learn from analyzing Average Annual Combined Cash-On-Cash (27:21)
  • The number one, most important number in real estate investing is…? (29:01)
  • What is the essence of our income replacement strategy? (32:53)
  • How and why do we calculate Total Capital Available To Reinvest? (34:38)
  • The power of leverage (38:54)


Top Quotes

“We’re in this to make money, but we’re in this to make money by providing an unbelievable, world-class service.” – Kevin Clayson 

“The idea is property number one, becomes the fuel for properties number two and three.” – Kevin Clayson

“The pro forma that we use – it’s a tool… It is our quick way of analyzing a property.” – Steve Earl

“We really advocate 25% down (payment).” – Steve Earl


Additional Resources:

  • Learn more about Done For You Real Estate: VISIT HERE
  • Get a FREE Income Replacement Estimate (IRE): APPLY HERE
  • Get the full list of our 35 DFY Market Selection Criteria (+ Top Markets): FREE DOWNLOAD HERE

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And remember…

Income replacement for you and your family may only be one property away!