All Forum Posts by: John-David Hails

I “analyze”  2-3 properties tops per deal I close. I have a lot sent via blast (10 a day). I scan those for about 5-10 seconds each so I wouldn’t count that as analyzing  

Then I get 1-2 deals a day sent by brokers I know. I’ll give those 5 min. Or what I’d consider “light analyzing”. But it doesn’t take more than a quick mini dive to give a yes/no (how much per door  how much per unit of rent. Normalize that across a few factors. Measure that against like comps)  

Any deal I glance at and seems like a fit there is a good chance I'll make a go at it at a more detailed look. And if a deal makes it to that point where I give it a "full look", there is a 50+% chance I'll send an LOI (and of those I get about 25%?).

 It’s gotten to the point where I’ll bid and even close on properties with no more than 5 min looking at some fugues. No calculator. No tour. No pouring though DD documents.  Not very smart of me to be honest but whatever. Properties are at a amorphous blob at this point  

I close on a $5m deal next Wednesday and I spent about 5 min looking at the rent roll.  Never event saw it in person. Though my ops manager drove by and said it’s a dump. I said “perfect”. 

I think it depends on where the deals are coming from that you are looking at. For example, are you getting e-mails from wholesellers in your area or looking only at properties on the MLS? Are you marketing for your own deals? When I first started evaluating deals I had my spreadsheet all set up and the problem was that I could create a "perfect" deal on my spreadsheet but finding it in reality was another story. You can spend a lot of time doing work that's just "virtual" (ie online listings, e-mail deals, plugging in numbers in spreadsheets, etc) but unless you are getting out and seeing (and smelling!) the property you don't get a good feel for what $X will buy in your market. While it may be true that on average you have to look at X # of properties, etc what if the "best" one is the 12th one you look at? You won't know if it's a good deal unless you are out looking all the time. Just my opinion ... may not translate as well in your market!

Values.

That's it.  It's all just valuation.

How much can you sell it for, after you renovated.  

Or how much can you rent it for, should you decide to buy and hold, and then how much will it likely appraise for (you will want to refinance it, once rented out).

Getting renovation costs down is the other part to this -- that is cost estimation, but that is also a form of valuation, isn't it?  This is the part where I need improvement.

If you found a great deal today, and called up your hard money lender to go take a look, those are the things they would ask you to provide, and they would provide their objective version of your deal, as a comparison.  What will that house be valued at, when you are done with it, and how much with it cost the renovate it?  Factor in your costs and your purchase price and you know if you have a deal, or not.  

So study valuation -- eg., running comps if you are doing single family. 

Also take some time to go through the calculators and tutorials and various materials right here on BP.  Great stuff here, and most of it is free.

I go 0 to 100.

Real quick.

Welcome,

You cannot become a master of this market. This market is too big. 

Become the master of a niche area, learn about the pricing, active investors in the area, the best realtors (listing agents) go to meetings, drive around and call FSBO's, and once you master that little circle, you will notice that your knowledge has slowly expanded into other circles. You can't force it or even allow it to draw you easy from mastering your original area. The "thrill" of expansion isn't worth the loss of distraction.

Good luck