Finding A Good Deal…Making sure numbers are real

[Russ Maynard]

Hi

I’m new to this sport and finally trying to get off the bench and into the game. Right now I’m reading and listening to as much as I can. As I’ve watched several videos and listened to podcasts here, I repeatedly watch the presenter put in numbers in a calculator to show how a particular deal is good or not based on a cash on cash return (cash flow property scenario). I can plug numbers in a calculator… I can build a spreadsheet that will likely mimic that calculator. But if I put in bad numbers….well that’s just garbage in, garbage out.  Obviously, gained knowledge of what things cost for real or knowing where to look is key.

I understand where we can look up tax rates and I can get quotes on insurance. What I am concerned with are things like estimating rehab costs, cleanup costs, other hard to define costs. A deal can look great on the calculator right up to the point you realize your $25k rehab is more like $50k. Suddenly your cash on cash evaporates and you need more than expected to get it on the market. How did you gain the corporate knowledge to put good numbers into your deal calculations. I’d love to hear from newer and more seasoned investors. Thank you