01Who pays, and why?
Name the payer and the economic activity or agreement that generates cash. A tenant, a customer, a company, and a borrower are not interchangeable sources. A deposit screenshot does not explain the costs or risks behind the receipt. Investigate the payment terms and the evidence that supports the proposed income mechanism.
02What remains after the obligations?
Subtract operating expenses, relevant financing, reserves, and other applicable costs. Include the owner’s time and the cost of replacing that labor. A partially automated activity can still require work. Describe the actual arrangement rather than assuming the word passive eliminates management, maintenance, or unexpected cash needs.
03What happened to the asset’s value?
Examine the ending value alongside cash received. A distribution can coexist with a negative overall return. Separate the portion you plan to spend from the portion you plan to reinvest; the same dollar cannot perform both roles. Keep assumptions about taxes, timing, and future payments explicit.