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Updated almost 3 years ago on . Most recent reply
Understanding the Numbers
I really want to analyze properties. I use to set a goal to search for at least one property a day. It has gotten to the point where I want to run the numbers and understand them. I get lost at times when people go deep about Cap Rates, GRM, and figuring out the return on investment. How long did it take you to properly analyze deals? How did you start? Thanks in advance.
- Ethan Augustus
Most Popular Reply
You have the ability to begin properly analyzing deals today. Real estate Investing is a practice. The amount of time you spend practicing real estate will ultimately help you grow as an investor.
Simplicity and tangibility are two of real estate's most attractive features. I do not use any sophisticated calculators, cap rates, or GRM tools. I rely on rehab estimates, cash flow projections, and the overall feel of a building/neighborhood.
I started out working as an agent for an investment focused real estate brokerage in Cincinnati, Ohio. They had me comp out anywhere from 5-25 potential deals per day for 2 years. Over time I became more and more efficient at analyzing these opportunities quickly. Today I can assess deals in my market (Toledo, Ohio) from my iPhone in under 5 minutes the vast majority of the time.
Where to start is not nearly as important as actually starting. Choose a neighborhood and begin collecting data/research to learn as much as you can about it.