I've worked with over 500 real estate investors and when they fail it is always preventable.

I told you last week that real estate investors don't have their financial life in order. Nothing has changed since then, but here's Part 2 of the checklist to test yourself. Most investors won't do all of it. But I'm going to keep telling you to anyway. And when it bites you in the booty, I'm going to say, "I told you so." 1. Review your insurance annually with a professional. One of the key ingredients in real estate investing is debt. The wisdom of using debt looks very different if you're out of the picture or not properly insured. Meet with an insurance expert at least annually to review your financial life and make sure your coverage is adequate and in force. I've seen underinsured investors pass away and their heirs weren't taken care of the way they expected. 2. Check your tenants' renters insurance. Make sure they have it, that it stays in force throughout the tenancy, and that the liability coverage is appropriate for your risk. You will say you can't possibly do that, but you can. 3. Verify your vendors' insurance. Before anyone works on your property, confirm they are insured and that their coverage is appropriate for the work they're doing. 4. Have a will or trust in place. Real estate complicates estates. Make sure your assets transfer the way you intend. While you're at it, update the beneficiaries on your policies and accounts. Life changes. Beneficiaries don't. 5. Keep your operating agreements current. If you hold property in LLCs, make sure the documents reflect how decisions actually get made. This matters when something goes wrong. 6. Know your loan terms. When do ARMs adjust? When do balloons come due? Are there prepayment penalties? Know the answers and keep them accessible. 7. Maintain a cash reserve. A common rule is 3–6 months of expenses per property. At minimum, have funds set aside for vacancies, emergencies, and major repairs. 8. Build your professional team before you need them. Attorney, CPA, insurance agent, property manager