How Should We Properly Analyze a Deal?

[Thomas O'Donnell]

Good morning everyone at BP! I know we have all seen multiple ways to analyze a deal and run numbers to determine what is a good/bad deal. But what are some of the BEST ways to analyze a deal? I currently use the BiggerPockets rental property tool, but I feel like there has to be more that goes into it. I really want to get good at analyzing properties so that I can make the best decisions for my investing future. I am currently looking to buy my first rental property via house-hacking, and although it doesn't need to be a home run, I would at least like to get a nice base hit to get the ball rolling.

[Conner Olsen]

@Thomas O'Donnell A home run is very unique to your market. For me right now, it would be $800/month as a medium-term rental. 2 years ago I could get $2,000/month. I think the easiest way to figure out if a deal is good is to analyze minimum of 20 deals, put the numbers (cash flow, cash on cash return, IRR, whatever metric you want to focus on) into a spreadsheet, Find the 25th, 50th, 75th percentile of each of those metrics (or use whatever percentiles you want). Now you have the homeruns, triples, doubles, and singles. Once you get up to the 100 range you can find the 1 or 2 'grand slam' deals.