How do I know I'm analyzing deals correctly?

[Julio Velazquez]

Hello BP,

I often hear there are deals everywhere, some even say they got their first deal from a listing off MLS, Zillow etc.. I've been using the BP calculators to analyze deals but a lot of the information being asked is all estimates.. For what ever reason the area I'm looking at when I search for comps in the area on zillow or trulia usually other properties with similar price points were sold. The rehab is an estimate as well, So how do I know I'm analyzing the deal correctly?

I know you have to look at around 200 listing to probably come across 10-20 worth actually looking at. 

The uncertainty of doing it correctly is a little daunting..

Thank you in advanced.

[Ryan Freet]

@Julio Velazquez If you are looking for a sort of immediate pass/fail in terms of deal analysis there really isn't one. When you first run your repair estimates on a property, you just want to be ballpark in order to make an offer. Once your offer is accepted it is wise to get 3 quotes for contractors which will give you a much harder number and be the first sort of "verification" for your estimates. If there are any big misses from your numbers and what the contractors all quote, you could ideally renegotiate the offer through the use of an inspection contingency.

Some investors have developed relationships with contractors to the point that they will walk the property together prior to submitting any offer in an effort to be more accurate and competitive. With all of that said the best option is still to keep running numbers and just get better at it. Practice makes perfect and each time you will get better!