When have you hit Analysis Paralysis?

Question

When do you say "this is a good deal" and what is the math that you use to come to that conclusion?

Greg Scott · Answer

Ahhhh   The answer to that question is more about what is going on between your ears than the math on the page.   Only you know what is happening there!

Steven Machuca · Answer

@Adam L. True, I read both of @Brandon Turner books and have been the corner stone of how motivated I am.

Adam L. · Answer

@Steven Machuca, some of the books and podcasts on this site will help you greatly and get you motivated to work at this! Keep learning and ask a lot of questions.

Steven Machuca · Answer

@Adam L.  Thanks that's was a lot of recourses,  That's something I lack and want to work on.

Christopher Phillips · Answer

@Steven Machuca

Most of what you need can be found on bigger pockets.

Are you looking to do buy and hold rentals or flips? Maybe both.

Steven Machuca · Answer

@Greg Scott That's true I do get a little to into my own mind on things.  But is there a certain type of numbers you run for those of us that don't understand what you mean by run the numbers.

Greg Scott · Answer

@Steven Machuca  I agree with @Adam L. that a great way to go about it is analyze deals, lots of them.

I'm worried you may be getting to emotional about the decision, which tends to make most of us fret over the numbers for hours (I've done that many times).    Try this.   Instead of an area where you want to buy properties, go find a similar area where you would NEVER buy a property.  Then it is "safer".   Maybe it is a 2 hour drive away or in another state.  (Ideally, check both properties on the MLS and look in Craigslist for wholesale properties.   Note, those may or may not be good deals)   Then run the numbers on dozens of properties.

It is like learning to walk or ride a bike.   After a while, it becomes intuitive.   Soon, you will be quickly sorting properties into "good", "bad", and "maybe" piles.  (From the MLS, only 5-10% will end up in the "good" pile.)   Soon after that, you can spot the ones with real potential with 1/2 the information you did before.

Now, when you decide you are really ready to buy, the good ones are easy to spot.   If you find a lot, you won't even worry about the "maybe" ones.

Adam L. · Answer

To start I want you to know I'm not experienced in purchasing properties but I have analyzed many many properties. I'm just stuck in the rut of just analyzing right now so... take my thoughts with a grain of salt.

The math to come to the conclusion really depends on what you are looking for and where you are looking at it. You will have to look at what you can get for rent in the area by knowing your area well, researching on things like rentometer, or checking rentals in your area on sites like Zillow or the like. Additionally you will need to see what the cost will be for your property in particular. In general the things you need to look at are the standard payments (loan, tax, insurance,etc), capex, vacancy, PM, utilities (if paid by the owner), etc.

If your goal is $100/door or 1% or 2% or whatever then make sure your numbers match your goals. Stick to what you know will meet your needs/desires and go for it!

There are plenty of places on this site that will help you understand how to analyze but hopefully the little bit I put here helps you out some.

Steven Machuca · Answer

What are some places where one can learn to do such analysis and what does it entail? @Christopher Phillips .  @Greg Scott That's a good point so what is it that goes on between your ears when you come past the math and  when youre actually executing the "AHA!" moment of the deal.

When have you hit Analysis Paralysis?

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