Great question because we all need to define that at one point or another. Deals are relative from city to city, area to area, and investor to investor. Personally I look at deals in this way:

1) What can I quick-turn this deal for cash?
2) What are the liabilities I'm exposed to financially and legally if I proceed with this deal.
3) What are the long-term profit potential upsides if I do this deal.
4) Here's my favorite and catch all----if the absolute worst-case scenario happens on this deal, will is set me back or cripple me?

Each investor will have differing levels of comfort in relation to risk and reward so we all have to answer that for ourselves. Past that at one point or another the greatest risk is not taking one.

Scott