Early Questions

[Tahir Kurji]

Hey BP and thanks for all the valuable info so far. I just finished reading the Ultimate Guide and had a few questions.

How do you decide what strategy to use? Is this only based on preference? And should you only look for and buy properties that fit calculations for that strategy?

How do you calculate whether a property is a sound investment other than the 70% rule? Is there a more complex formula that allows you to factor in expenses as well?

Again thank you so much. I am learning more everyday because of this site.

[Tanner Trokey]

Preference is a factor, because be honest. If what you do doesn't interest you then it most likely will not work out for you. Do you want passive income or active income? It also depends on the amount of capitol you have or the availability of capital either from friends, family, or lenders etc. Find a local REIA's and just talk to different people and see what they're doing how they started and you will get an inside perspective on different strategies. The 70% rule is a good starting place. It depends on your market though and the spreads. It's not a one size fits all rule. For ex. Someone looking to build a rental portfolio may pay 80- 85% because there more are so buying for long term appreciation or cash flow rather than short term cash. My advice is to get a better understanding of the market you are looking to get into. Figure out prices and rents for different areas. Pick a criteria for ex. like 3bd 2bth 1500 sqft then look at similar houses in the same neighborhood or least within a half a mile with same amount of beds and baths and couple hundred feet within the square footage. Since I do not have access to the MLS yet. What I do is go on different sites like Zillow and homes.com and realtor.com and get an average (usually the lower average, just to be conservative) for comps of neighborhood I am targeting. Just keep reading the site and listen the podcasts right down notes and ideas, and it will start coming around for you. Best of luck!