Hi BP Community,
I'm just starting to analyze deals and I want to get everyone's opinion on how they conduct their analysis. I've used the BP calculator, but being that I am a financial analyst in my day job, it's bugging me that I'm not really seeing what's going on under the hood. Do any of you use spreadsheets or it that too laborious?
I use both depending on the strategy. 95% of my deals are a typical buy and hold and I can do those faster via a simple spreadsheet. I have not set the spreadsheets up to generate reports and graphs but just a quick plugin to see if a deal meets my financial criteria (cash on cash return, ROI, profit per door, etc.) If a deal passes the initial test, I can then use the calculator to generate a report for potential lenders.
If you're finding something to get under contract...... you should be able to do that in your head quickly, pretty basic criteria (the 1% or 2% rule for example). Once you make an offer, again little more thought but generally speaking you should of already tossed out a lot of properties that don't fit... so it should be pretty simple. I wouldn't waste my time making a complex model until you got something under contract. Something will ALWAYS come up during inspection you can reduce or adjust your numbers then or go in under what your est is and let them bid you up.
There's sheets on this site that even go into calc maintenance expenses down to items (roof, water heater etc based on anticipated life). But I'd save that for the ones you get under contract in conjunction w/ offer.
I use a spreadsheet for all of my analysis. I like to know and see the math. Disclaimer: I’be only glanced at the BPcalculators.
Thanks so much for all the responses everyone! It is so helpful to know how others run their numbers.
@Sean Lambert that is exactly how I feel. Did you just create yours from scratch or did you use a resource?
James Catuara I just created my own and have been evolving it over the years. It probably doesn’t look as pretty as the BP reports, but I just want to look at numbers and tweak them quickly based on different terms and expenses I’m comparing.