How to identify Markets to perform Analysis On?

[Stephen Wolfring]

Hey,

I'm from Long Island and am interested in out of state rental properties. Any tips on how to identify markets to start performing analysis of the potential properties on? I have been throwing darts at a map and feel like there has to be better ways to run analysis and perform due diligence.

Any tips and advice would be great!

-Stephen

[Joe Villeneuve]

For Flipping:

1 - Split up properties into groups based on sq ftg, with the high end not mor than 20% more than the low end

2 - Take sold comps and put them into these ranges.

3 - find out the dominant sold comp in each range.

4 - Do the same for properties for sale, using the exact same sq ft ranges.

5 - Add rehab cost to the for sale numbers.

6 - subtract the 4Sale/rehab (with closing costs) from the Sold comps in each range...and you have the potential profit of each range.

For Holding:

Replace steps 1 - 3 with rents

Re-use steps 4 and 5

Replace step 6 with rents - monthly expenses (don't forget to include the financing based on the for sale comps)

This gives you your potential cash flow.

Remember, and this is very important, each sq ftg range is separate, and should not be mixed...especially if you do could mean a deal works.  That's rationalizing...and will lead to trouble.  The number$ don't lie...so don't argue with them...you'll lose every time.