Knowing your deal is the one

[Nader Hachem]

Hey BP!

Starting off in the real estate investing world, i have committed myself to purchasing my first rental property this year. I've been spending time looking over properties on the MLS and analyzing ones that i am interested in. One thing i see people talking about is don't settle and keep analyzing until you find an ACTUAL good deal. Sometimes i run into a deal that looks good in my eyes - but i believe this is just because i'm a newbie and could either be tweeking numbers [not adding enough closing costs, after purchase repair costs] or just be settling for less in excitement to get my first deal.

I usually look for deals with a 10% CoC return with $150 CF in my single family rentals. What tips do you guys have for a beginner who is excited [yet nervous] to jump into their first deal? I don't want to jump the gun on a deal that i'm tricking myself into being a good one just so i could have my first property. Whether tips on education, analysis or simply believing in your ability to run numbers correctly? What kind of numbers do you guys look for as a standard for your SFR deals?

[Evan Polaski]

@Nader Hachem, yes many PMs, not all, charge their 10% for management, bookkeeping, tenant calls, etc.  In the past, I was always charged a leasing commission on top of that.  Mine was 1 mo for new lease and 1/2 mo for renewal.  

If you are going to use a PM and be "hands off" you just need to understand all of the fees that go into them.  Again, I saw 10% management for basic service.  I outlined leasing commissions I saw above.  One I saw was construction management fee, which was overly general that if they hire someone they get to up charge a fixed percentage.

Here is a blog that was recently posted about common fees you may see.  https://www.biggerpockets.com/blog/9-sneaky-fees-watch-hiring-property-manager