I think I'm doing my analysis wrong.

[Meldeine Sipes]

I recently spoke with a property manager/realtor in Las Vegas. She's been sending me listings of multis in Las Vegas. Most of them are super old and I haven't really seen any decent looking ones. I'm afraid to purchase any of these because they're so old, I don't want money to be tied up in reno. I don't know how to do the analysis for how much to put down for renovations/rehab. I'm afraid I'm not going to put enough on the analysis and end up purchasing something that will just tank because I f'd my first buy because of a completely wrong analysis.

[James C.]

Meldeine,

You are doing your analysis incorrectly. Maybe a different way to say this is that you aren't looking at things in a logical,  business oriented way.

Remember, the value of any investment is the return you make on that investment. Notice there is nothing in that statement about the type of investment. 

What you are lacking is information.  When you make statements like "I don't know" coupled with "I am worried", that is a dead giveaway that you need to go get information. In essence, you are whining about what you aren't doing.

Think about it this way, if you knew EXACTLY the entire financial profile of the investment  (acquisition,  rehab, running, exit), then you  would just throw your numbers into your business model and be done.

You can never know exactly (if you want to, it's analysis paralysis), but with good information  (research) you can get close enough that you get comfortable enough to purchase the investment. 

So your job, if you want to invest in multi family, is to stop whining,  and go get the information for how much it's going to cost to rehab the unit. Then put that into your model and see if it meets your return criteria. That's the work of being a profitable investor. 

Ultimately,  there will be some risk you will have to take, but that's investing. 

Hope that helps. 

Good luck, 

Jim