Hello Friends! I am new to the club and new to real estate investing. I initially got into the game with my wife, but I have two very experienced mentors who are now walking this road with us and have given me tremendous input and helped us not to get into anything that will lose money. One of our mentors has been in the REI game for over 10 years and owns upwards of 50 rental properties that he has flipped, in addition to scores of other flips he has personally done and to date he has never lost money on a deal, but has profited from every deal he has picked up.
I share this because they have both helped us tremendously in the last months to learn what is a deal and what is not a deal. I have developed a spreadsheet which is not anything ground breaking, but it helps to see in about 1 minute if a property is a deal or not (at least from a numbers standpoint). I am posting a dropbox link for you to download and take a look. Most of the fields are calculated, but the main numbers you have to put in are the following:
- Square footage
- Comp price/ft. (I use investway.com to get my comps. This is what my friend uses and it is spot on)
- Taxes
- Purchase Price
- Repair Estimate
- Days to Hold
All the other fields will calculate automatically. Please don't crucify me if you disagree with some of the calculations. Again, this is to help give you an idea of what is a deal and what is not.
At first, I was sending house after house to my friend saying, "Look! This house has a $50,000 margin in there, I am sure we can make some money!" He kept on running the numbers and explaining it wasn't a deal and we would either make very little or possibly lose. Eventually, I developed this spreadsheet, and when I have found a deal, I send it to him and we get going.
(Note: I have currently fixed the financing at 8% per deal. Feel free to edit and tweak, this is simply helpful for my situation.)
I hope this is helpful!
https://www.dropbox.com/sh/6ozrdhcoahmvex2/AADvmZi-gA84x3UuDxwJ_RN_a?dl=0
All the best!
Manny
