All Forum Posts by: Lloyd Winston

@Lloyd Winston

The important thing is to understand the math and different categories. Whether you do it in Excel or with software does make a difference. For example, if you are trying to put together a professional package to sell to other investors or if you are partnering up with other people, having a professional presentation (to a lender if you're borrowing money) makes a huge difference. Spreadsheets are great if you are just doing quick and dirty math to see if a deal is worth pursuing or analyzing further, but software that let's you put pictures of the deals and presents the analysis in a professional, and easy to understand manner could make the difference between getting a deal approved at your lender, or coming off as an amateur.

How familiar are you with the underlying math and calculations? Tools / spreadsheets / software are only as good as the user using them and are no shortcut for due diligence.

Lloyd Winston My personal opinion is that you should have enough analytical prowess to build your own spreadsheet on Excel or Google Sheets. The latter is free and almost as good. You're not going incredible complicated analysis but just knowing how calculations flow, etc. is helpful. Plus you get to add expenses that you might do that others won't. My favorite example: pest control. That's not to say that your results will be different than an online tool you find elsewhere but I still think there's value in building your own. And it just makes it so much easier to play with variables like changing your vacancy assumption from 8% to 10% and see how that impacts your cash-flow. Your mileage may vary...

Excel is a great free tool for newbies, but it's only as effective as the user. One simple entry error and your entire analysis could be incorrect, so always double and triple check. That said, it's highly recommended for a new investor to use manual systems such as Excel or even old-school pen and paper. When you first start, you need to educate yourself which means you need to practice (and master) deal analysis. It's great to use analysis tools on BP and other sites, but if you depend on them to do the math for you, you are more likely to make mistakes and find yourself under water in bad deals. It's also much easier to find partners, joint ventures, and lenders using creative financing if your deal analysis abilities are solid. Whatever system you use, make sure you get very good at deal analysis without relying on software to do the work for you. They're there for convenience and speed, not to replace your own skill!

Howdy @Lloyd Winston

It is not a matter of power!  It is a matter of understanding!  Do you understand the basic information you need and how to apply it to your analysis?  Can you conduct a basic analysis on a piece of paper or napkin?

Once you can do it on paper then you can use the tools (Rehab Valuator or BP calculators).