Your screening routine
I’ve been analyzing my market for quite some time now and I was thinking it would be interesting if BP members shared their investment screening routine (i.e. not the criteria of analysis, but the platforms and strategies), more specifically:
- What is your day-to-day routine to screen your RE market in search of potential investments? (e.g.: looking through MLS, contacting certain people, sending direct mails, etc.)
- What % does screening the MLS (+other websites such as Zillow, etc.) represent compared to other strategies you may use to find deals (such as direct marketing, etc.), both in terms of # of analyzed properties and # of purchased properties?
- When performing a quick preliminary screening on those websites (i.e. to exclude obvious bad deals), do you usually use the 50% rule (or similar % rule) to estimate expenses? I would assume it would be too time consuming to try to assess more specifically the operating expenses of each particular house?
- In relation to my previous question, why do most sites and books recommend estimating certain expenses as a % of rent? It doesn’t seem very intuitive to me. I mean, the replacement cost of a window, or painting a room has little to do with how much rent I expect to get from the property. I would believe it would make more sense to estimate certain costs relative to sqft2 for example (bigger house = more windows and more walls to paint for example). Do you guys use such type of estimate?