Calculating and analyzing potential deals

[Jared Sorrentino]

Hello everyone,

I am new to the real estate world and have found a way to get started in real estate. Right now I have a couple of trustworthy partners and together we are going to invest in a multifamily property. I understand that im looking for passive income and long term wealth and believe this is the perfect way to achieve that. I was looking for some help and advice in how to analyzing deals off of MLS sites and other sites as well. What are some key points that i need to be looking out for? One of my partners in this deal is very good and analyzing deals and i am learning everyday. I just wanted to reach out to you all to see if there are any tips or tricks in how to get more efficient at looking for deals.

Thank you all!

Jared 

[Terry Lao]

Jared

There are lots ways to analyze if potential investment is good or not, like cap rate, ROI, etc. I found that due to the vast amount of listings in any city, it's best to do a quick cashflow to see if property warrants additional consideration. I like to use the 1% rule, which is if monthly rent is 1% or greater than the sales price. For example, list price $200k, then monthly rent needs to be $2000 or greater to warrant additional consideration. Also, cashflows tend to be best if purchasing multi units. The best number of units is 4 due to conventional lending versus commercial at 5 or more.

Terrence