Best method to analyze deals

[Charles Robinson]

Good afternoon all. New investor here. Im sure this question has been asked a billion times however I wanted some input on what the process looked like when it comes to analyzing deals? What are some practical steps I can take that will ensure I get comfortable with “running my numbers” and ensuring that the deal is in fact a “good deal”? Thanks 🙏🏾

[Bob Okenwa]

@Charles Robinson

A good deal to me may not be a good deal to you and vice versa. Before anything else, define your goals and what you're looking for and work from there. 

Secondly, what kind of investing are you looking to do? Flips? Wholesale? Rentals? Commercial? Land?

Find a location that works for you and meets whatever criteria you set (cash flow, asset class, tenant class, future appreciation, etc.) From there, learn everything about that area. Learn where the neighborhood divisions are in terms of going from one grade of neighborhood and price point to the next. Learn whatever price points reflect that area and how it stacks up with your investment goals. For example, if you're flipping, learn what kind of spread you'll need to hit your target profit. If rentals, learn what the area rents are for each bedroom count and square footage count.

BP has a pretty good calculator to run numbers through so I'd get familiar with that. Run the numbers on at least 5-10 properties a day until you can see a listing and know what it should rent for, what kind of rehab it'll need, and what you need to buy it at to make it all work.

Rome wasn't built in a day and you won't be a real estate expert in one night, one month, or one year. Progress is a process. Take your time to learn and network and go from there.