How do you analyze each deal? (Buy and hold rental)

[Kornkot Dechanukul]

I would like to know how investors analyze each deal when they buy rental property.

What do you look for?

How you know someone would rent it ?

How do you determine if this gonna be good investment?

Can you trust housing data in MLS?

I did some research and comparison analysis on mls around my area but im not sure im in the right path. How would you buy your first investment property if you have 70k right now?

[Michael Ryland]

@Kornkot Dechanukul I just bought my first rental last month and just got my first rent payment on the 1st. I am in escrow with the second rental now. So time will tell if I made the right choices.

I spent about 6 months learning everything I could about the area I wanted to invest in. I subscribed to an email version of the local paper(I invested out of state in the KC area) . I had several conversations with friends and family in the area. And I would often check on homes for rent in the area. This gave me an idea of what was available, how many rentals were available, and what the competition was like.

All the signs of growth were there. Businesses were hiring, a new hotel and conference center were built, etc.

Then I calculated everything and was very conservative with my estimations. Math is math but you have to be realistic when inputting your expenses. The numbers made sense. I was patient and passed on a couple of houses and then stumbled on to my first property via a family friend. It was an off market home and had been a rental for several years. The owners were in their 80’s and had decided they didn’t want to be land lords anymore. It was nicer and cheaper than anything else I had looked at up to that point so I bought it.

There are several videos on BP about analyzing a deal and of course there’s the BP calculator. Good luck to you