Getting a Great Deal

[Ethan Brown]

Hi everyone! I've been looking on sites such as Zillow.com and Realator.com in order to practice analyzing potential rental properties, but I haven't found a property that provides positive cash flow yet (unless I lower the price I would have paid for the home significantly). How do you know if a home or the general market is overpriced/ overvalued? Also, how would you recommend I find the best deals on homes whether they're in my area or not? All responses will be greatly appreciated.

[Nick B.]

1. Define your criteria for a "great deal": e.g. 3/2/2 1500-1700 sqft, rents for $1500+, "all-in" cost $120K, 20% cash on cash, $20K equity capture, $20K out of pocket (all numbers are for illustration only)

2. Analyze listed homes to see if any of them fit into the criteria. (Most likely they won't.)

3. See if there is a way to negotiate the price down to where it makes sense for you. 

4. If you and the sellers are miles apart, change your criteria or look at a different market.