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!
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.
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.
@Joe Villeneuve I've been looking for a great way to pick out new markets as well. Can't wait to try this method. Thanks for the insight!
@Stephen Wolfring I'm located in the Queens area but right on the border of LI. Maybe we can meet up for a cup of coffee. I'm interested in doing some flips in Suffolk county. Have you done any investing in the LI area?
@Charles S. I'm doing a flip in Suffolk right now. Market is hot, plenty of opportunities if you can buy right
No kidding?! Would love to talk more about it with you. I’ll send a connection request. Thanks!
Haha. Have you tried throwing them blindfolded?
Old article, but might give you a slightly narrowed down starting point?
What kinds of properties are you wanting to buy?