What tools do I need to figure out if I have a good deal or not?

[Neil Marchmon]

What program do I need to buy to figure out if the houses I find are  Good deals or not? I’m new. 

[Tim Herman]

@Neil Marchmon Real estate is all about numbers. Learn to use the calculators on the site. Attend or look at the past webinars. The numbers I use are vacancy of 8%. Why 8%, That is the equivalent of 1 month vacancy out of 12. A 2% vacancy is your tenants staying an average of 50 months. 2+100=1/50. Repairs of 5%. My area every time I call a repair person the minimum is $150 charge. On a $1000 per month property you put in reserves of $50 per month or $600 per year. You can have a couple of repairs and still save some money to paint between tenant turnover. Capex the silent killer of newbs. I use 10% minimum. The minute something is rehabbed or built there is a cost associated with replacing it. Say you bought a rental with new floors. My area it is $6sf to replace. Assume 1000 sf of flooring. Floors have a lifespan of 10 years. $6000/10 year life span/12 months in a year=$50 per month that was brand new. Say your floors are 5 years old. Your capex budget for floors is now $100 per month($6000/5 years/12 months). You still have to account for roof 25 year life span,appliances and hot water heater 12 year life span, hvac 20 year life span, bath and kitchen remodel 20 year life span, etc. The calculator will be your best friend in the business