Practice Analyzing a Deal

[Kyle Sutton]

I really believe in the recommendation to "practice analyzing deals everyday" when starting out.  

So how do you do that?  Would it be as simple as finding a property listed on one of the for sale sites and then plugging #s in to the bigger pockets calc?  Do you do it a different way?  Can you share?  

[Robert Gandy]

@Kyle Sutton, everyday, I check the MLS in my target area. I look for new properties and I also look at price reductions. You can check www.floodsmart.gov to see if flood insurance is required. You can (depending on the jurisdiction) check to see what the property taxes are. You can use an online mortgage amortization caculator (or import one to Excel) to see what your monthly payment is. Then search zillow, postlets, craigslist, realtor.com for comparable rentals and rates. You should use the bigger pockets calculators or develop your own tool. Be sure to think about how much you will put down, what is a realistic interest rate based on your credit and/or loan type? What about closing costs (these could be up to 6% of the home price)? Are you going to buy move-in ready, or do you need to do any rehab? What are the potential holding costs until it is move in ready? Are you going to manage or will you hire a property manager (could by 10% or gross income)? You have to practice each day so that you know what your numbers to succeed are. That way when a deal does hit, you can be ready to move quickly.