Hello there Jelani,
I am new to all of this as well and I just so happen to live in Darien Il. Aurora is one of the target areas that I am studying with my analysis of properties. Here is a link to an excel spread sheet that was posted to the forums. I just downloaded it tonight in fact.
https://www.biggerpockets.com/forums/88/topics/255...
Being a newbie with all of this and not having any current access to detailed numbers (or at least not knowing where to look for them yet) here is what I have been doing when it comes to "analyzing properties".
I have used Zillow, Redfin, and Trulia for each area that I am looking in. I have also "driven for dollars" in these areas. When I started with this, I just looked at prices of houses in that area and used an online mortgage calculator to see what payments would be like.
Being conscience of vacancies, I began to see what would be affordable for me out pocket and this narrowed my search. Obviously, if I cant afford the mortgage out of pocket, then the numbers do not work for me and its a "No Go".
Taking an average rent of similar properties for the area (3/2 SFR), I used this average to determine income of the property.
I take the same listing and run two basic, and I mean real basic, "analysis" of the property.
First is just the list asking price. Using parts of the 10/10/10 rule pg. 46 from John W. Schaub's book "Building Wealth One House at a Time", I calculate using only a 10% down payment and a interest rate of 10% or less (I have been using 6%). Once I know what the mortgage would be I use the 50% rule to determine whether or not cash flow would be positive or negative.
I then re-run the property in the same manor using 70% of the listed asking price (taken from another book, I think it was "How To Make Money In Your Local Real Estate Market" by Brian T. Evans but don't quote me on that). The other variables stay the same, aside from the actual amount of the down payment. The percentage stays at 10% for the down payment.
The cash flow always improves but could still be negative. If that is the case or it doesnt earn a positive $100 per unit, its a "No Go".
This has helped me train my mindset and my eye for properties just by running them through this method.
This is hardly a proper way of analyzing, however I started doing this even before I saw the 22 1/2 actionable tips podcast, which was awesome by the way. This was exciting for the reason that my head is really getting into the game and that podcast confirmed it for me.
That being said on podcast 116 with Nasar Elarabi, Nasar had a tip of always paying attention to the comps. Once I did that I realized that I had more possibilities than I thought due to the asking price being above the comps for the area. Be sure to watch that podcast. I have listened to it several times already.
Anyway, getting back to Aurora, with the numbers that I have been working through, I am leaning towards dropping it from my list.
Hopefully this makes sense and is of some use to you.
Take care,
Eric
