How to Decide Which Real Estate Deals Are Best for You
One of the things when looking for real estate opportunities is you have to decide which real estate deals are best for you. By best for you, I mean which ones make the most sense for you to invest in. That will depend on a number of things.
You want to look at what your exit strategy is going to be like and ask yourself what your long-term game plan with investing is.
For example, are you looking for properties to buy and hold? Or are you looking for properties to flip meaning fix and flip, or are you a wholesaler? Are you looking for properties just to pass over to somebody else who is going to do the fix and flip?
It is crucial for you to do some financial calculations when looking for properties, as well as a number of other things I will discuss.
You want to look at the financial viability of the property.
You also want to look at the current situation of the property. You want to look at the location of the property.
The nice thing about doing all this is that you are able to do your analysis right from your desk. A lot of people go out and start looking for properties in an area without knowing which real estate deals are best for them. We call this driving for dollars. That’ seem’s a lot of work.
The great news is there is a lot of information online that you can access when looking for properties.
You can go and do a lot of searches on a lot of different sites and you can find properties that you can analyze based on which real estate deals are best for you.
You can go to online classified ads, you can go to MLS and you can go to auction sites. Again, when you are looking for which real estate deals are best for you, you have to make sure that you are okay with them and that you are analyzing them with your long-term objectives in mind.
Some of the criteria might be the price of the house. A lot of people who are doing fix and flips, or who are doing wholesaling, want to make sure that they can get the property anywhere from 50% to 65% of the after repair value (ARV) of the property.
If you are looking at buying the property and holding it, and it is in good condition, maybe you only have to look at properties that have a positive cash flow. That is a different type of analysis. What you look at in this case is what can you purchase the property for … what are the financing costs and the ongoing maintenance of that property and what the rents are going to be. You are looking at a cash flow analysis.
So, again when looking for properties, make sure you determine which real estate deals are best for you.
