How To Finalize Your Deal Analysis
When looking at real estate investment, you want to make sure you finalize your deal analysis.
The first thing to do is you want to make sure that you’ve done a proper financial analysis. A lot of people tend to do that at a very high level. I never really do a detailed financial analysis at first and that is fine when you are starting out and you are just wanting to put in high-level offers.
One of the things you need to do as part of your due diligence is a detailed financial analysis and part of your overall deal anaylsis. What that means is getting all the numbers from the owner and figuring out if that property makes sense for you. That includes a number of things, depending on what type of property you are looking for.
If you are looking for just a property that you are just going to acquire and flip, the financial analysis is going to be pretty easy.
All you need to know is some basic things like what are the property taxes what is the insurance cost, and what are the renovation costs.
What that means is that you have to look at the finances to figure out what the current financial situation of the property is, and what can you purchase this property for.
You would also need to do a market assessment as part of your deal analysis and figure out what the after-repair value is going to be for that property in that market.
That is a pretty simple deal analysis for somebody that is going to do a fix and flip, which is ultimately the kind of analysis you would be doing whether you are a bird dog or you’re a wholesaler, or you’re a fix and flipper.
The other type of deal analysis is if it’s a rental property. In that case, you’ve got to look at all the expenses that you’re going to incur as part of owning that property and the types of rents you are going to get as part of renting out that property for that area.
Don’t move forward until you do that final step, which is doing a full-blown deal analysis for the property for the type of investment you are going to invest in.
