Long distance analysis

[Jamal Stroman]

Hello all,

I've heard it said that a beginning investor should analyze 3 deals per day even if he isn't buying presently. I started to do just that and I quickly found that analyzing 3 deals per day is giving me fits. Specifically, estimating the electricity, garbage, sewer, water, monthly insurance, vacancy, repairs and maintenance, cap ex, purchase closing cost, estimated repair cost, ARV and property management. I plan to invest out of state / long distance so getting accurate numbers has proven to be a challenge. I'm curious to know how other investors are getting accurate numbers

[Daria B.]

For insurance you can call a broker and give them a couple of homes that you are interested. Unless you have a dedicated broker and has become very good acquaints, I would say calling with every home that you are not buying will get old quick. But starting out, you should be able to get an idea of insurance. They look for things like roof age, home age for electrical and plumbing but in my experience mostly electrical if it's an old home pre 1960.

For taxes, you can go to the tax web site and call the tax collector. These individuals will give you a lot of information about mileage and how to calculate and what other things to look for like buildings on the property that will also get assessed. Yup, it's not just the main property, at least not in my area.

Your electrical and sewer are (at least in my area) are going to be paid by the tenant. Sewer, if it shows up on the taxes would be a component of your analysis that is figured into the portion of rent garnered for the property. For instance, you include taxes as part of the expenses and sewer and garbage are what you pay on the tax bill. So you have already accounted for the taxes.

Closing costs are a lender specific item and you should call a few in your area not to just get their fees but to get established with a few that you can call when you need to get a pre-approval letter.

PM is another call out to local companies to find out what their fees are they charge and what you are willing to accept or your expectations of that % and any other fees. I pay 10% for my properties in my area with no other fees. Some will charge renewal fees, 1st placement fees (this is a killer if you have yearly turnover), ad fees.

Vacancy in also a market determination. Seems to be that 8.3 to 10% is the going percentage I see in a lot of areas. I believe PMs can let you know what this is if you call and talk to them.

Once you have the basic numbers down you don't need to always call because you get an idea of what things will cost. Like insurance for a home that if the next property you find is in an area you've already gotten a quote for you know that property won't be too far off. Considering same or thereabouts sq ft and age.

I use an app called Deal Check by @Anton Ivanov that is a fantastic tool and has become my 1st source to enter data. While I still have my spreadsheets, I use the Deal Check when I'm away from my spreadsheets. The nice thing is that is does rentals and flip analysis. I would advise this be part of your organization to get your own spreadsheets, or, start with what others have developed in the file share and amend them to what works for you.

Good luck.....