How to Analyze Deals
Good Morning BP!
After putting down @Brandon Turner's "The Book on Rental Property Investing" (3rd time reading this awesome book) a question popped in my head and I knew I should jump on here immediately as I want to be more proactive with my studying and taking steps forward to investing and taking action. So my question is this:
I want to start analyzing deals just to do it and use it as practice to sharpen up my analyzing skills. When I read and I go over my plan it seems so easy to me and that I can do it, but once I go on MLS or zillow and All i Have is this picture and small description of the home, I get into this "paralysis by analysis" phase and everything gets all confusing then numbers start to scare me and then I just give up. Im not giving up though now, the best way is to figure this out and I would greatly appreciate if anyone has any advice for this and if they went through the same thing.
My issue are these:
- How do i figure out what to plug in for my rehab costs?
- How do I come up with a number for my expenses?
- What number do I come up with for painting interior or exterior?
- How do I estimate a number for my closing costs?
- How do I estimate expense for capital expenditures in the rent?
When I am reading the book the numbers are spit out so easily but I am just curious of how are those numbers are brought up? Yes I know this is all part of the "analyzing and figuring it out" but I am just looking on some type of direction to start moving so I can practice analyzing deals. I would like to spend an hour a day just practicing and coming up with numbers and figuring out CoCROI.
Do clarify exactly my target market I am interested in Analyzing small multi-family (NJ) homes possibly a duplex since its my first investment and I am trying to gain much experience as I can. Also correct me if I am wrong going about analyzing a down payment.
Thanks so much guys!