How Do You Analyze Deals Quickly? What Tools or Methods Do You Use?

Question

Hey everyone,

I’m new to real estate investing and currently based in Dallas (Irving). I’m focused on learning how to analyze deals quickly and confidently — especially small multifamily or house hack opportunities.

For those of you with more experience:
1️⃣ How do you personally analyze deals — what’s your step-by-step thought process before deciding to dig deeper or pass?
2️⃣ What are the most important numbers or metrics you never skip (e.g., CoC return, DSCR, cap rate, etc.)?
3️⃣ Which tools, calculators, or spreadsheets do you rely on — free or paid? (I’ve seen some online, but I’d love to know what actually works in real life.)
4️⃣ Any advice for building speed without losing accuracy when running comps or deal analysis?

I’d love to hear how the pros here streamline their process — what’s truly made deal analysis easier and more accurate for you.

Thanks a lot for any insights you share!

— Shahab
Irving, TX

Bruce Lynn · Answer

I would say don't overcomplicate it with anaylsis or you probably won't ever buy anything.

For house hacks....know what you can rent your bedrooms for....how do you know that #.  Ask your friends, ask your coworkers, monitor room rental websites.  There is no website I don't think that will tell you those numbers.  It's your personal research.  I would also think you need to be cheaper than a one bedroom apartment by some factor for the incovenience.

You also need to know what you qualify for price wise, so you want to talk to a lender and see what kind of loan you can get, how much money you can get, and what you are comfortable with.  Then apply your rent numbers to this.  So for example you can buy a five bedroom house and rent 4 of the 5 while you stay in 5th bedroom, and you can rent at $1000/month and your vacancy rate is 30% then you'll have $4000*7 to cover mortgage and utilities and maintenance.

Only you can know your numbers and what works for you.  Do you need that 5th bedroom or are you flexible that you will rent it too if you can and figure out where you sleep for a month or a year.  Are you willing to sleep on the couch or in the laundry room?  Do you want the primary bedroom with an ensuite bath or if you can rent that one for an extra $100 and you take one of the bedrooms with shared bath.I pick occupany of 70% because that is probably where a lot of hotels and airlines are, but that can also depend on you and how active and agressive and maybe how lucky you are finding roommates and maintaining the property.  Some hackers for example create a social environment like game nights, or pizza parties to give the roommates a sense of community.  That sometimes make tenants stay longer vs just renting a cold bedroom with no interaction and no community.  Which type of person are you?  Are you a connector and an organizer, or are you head down, keyboard puncher, with headphones on, isolationist working at the office?  Are you or can you be 100% focused on finding roommates and staying at 100% or more occupancy, or do you wait for someone to reply to a facebook ad.

Everyone is differnt with different models and different expectations and different opportunities.  Do you have multiple investment options and will choose between the ones with the greatest returns?  For example if you have $40,000 to invest and will put it in QQQ for 12% return, vs house hack at 8% or a duplex at -4% return.  Would you leverage your QQQ with margin loans and 3x 4x or 10x leverage?  How do you compare the risks?  They are not the same.

I say just do your basics and see where your comfort level is and know what you are capable of..and go for it.

Bruce Lynn · Answer

Small MF, you're likely to be negative cash flow in today's world.  So you have to get comfortable with that idea and then all your best investment calculators are negative. You are likely to have to pay full rent on your side and be negative on the rental side.  Are there exceptions, sure.  Is it normal, no.  Are these in areas you probably want to live in, No.  Will they need lots of work, probably.

Your best and maybe only profitable house hacks in DFW in todays world are buying 4-5 bedroom house and renting bedrooms.

We don't really have a lot of 2-3-4 units in DFW in my opinion and what we have doesn't turn over a lot.  The cash flow you probably have to work into over time and maybe that is the same with all or most investment properties in today's world in DFW.  You may have negative cash flow for years 1-2-3-4-5 until you can refinance at lower rates, refinance at increased value, and/or raise rents.  That is at traditional leverage.  You can always put more down, like 30-40-50% and cash flow.  it's a function of your leverage.

I would probably not focus on one particular area because of lack of inventory.  You probably have to search all areas.  Your best deals and best cash flows will probably be in C and D areas at this point.  So the toughest parts of the cities.  I just don't think it is possible for example to walk into Highland Park, Prosper, Southlake and buy a 4plex with minimal down and cash flow day one.  Of couse when you buy in C/D areas you are also buying some headaches and risk in return for your cash flow.  You'll likely be buying older properties with potentially riskier tenants and things like theft of AC units or gunshots at night and things like that.   Everyone has different risk tolerances and return expectations so it just depends on what works for you.

ADUs in DFW are few and far between.  Great if you can find one where the numbers work, but I would also think about your exit strategy.  Much more limited potential buyer pool when you sell.  I would expect if you ever find a duplex conversion here it is illegal and I would not buy it.  I'm guessing I've been in 30,000 homes in DFW and maybe seen 2-3 duplex conversions.  I think this idea of duplex conversion and ADU applies to places on West Coast, and Northeast US like Boston/NY than to Texas.  There has been a bit of movement in regulations here lately that are probably moving to more flexibility, but so far I don't see it in DFW much.   However even in places like CA where they changed the ADU regulations to allow more access and everyone got really excited, it really hasn't turned into the ADU explosion people thought it would.

I would not focus on CoC or CapRate on single family or duplex properties.  CapRate has it's limitations anyway, but to me it is a tool to compare big MF, office buildings, hotels, etc with different agents, sizes, costs, rents, tenant mix, etc when perhaps you 3 options.  Honestly never seen a single family investor sit an analyize 10 properties and choose one based on cap rate.  Not saying you shouldn't, not saying it couldn't work, but just saying I don't see it.

Are you looking for a place to live in or only investment property to rent out?

If you are renting now, my suggestion is also to throw out the window all ideas you see on the internet and youtube.  If you need a place to live, buy the cheapest, ugliest house you can find in the area you want to live in or close to work.  Move in, fix it up as you have money, and as fast as you can build more capital, rinse and repeat.  You'll probably be able to get better interest rates on owner/occupied homes, more leverage, you can build up sweat equity.  If you can generate capital fast enough, you can potentially do this every year.  After you get 10, flip that to small MF and do it again.  All and I mean ALL the really successful real estate investors I know say it is a SLOW get wealthy business.  Not buying 10 properites leverage to the hilt year 1 and not talking about how fast they can scale.  More like buying one single family a year or maybe in the beginning every 2-3 years, building up that portfolio and at some point, maybe year 10 or 20 moving some of that to a small commercial building, hotel, MF.  Maybe somewhere in that 20 years you get a cycle or two where more opportunities happen and you try to take advantage of those to grow quicker.

Hope that helps.

Shahab Ahmed Qasim Smoqi · Answer

Thanks so much, Bruce — I really appreciate how detailed your answer was.

Just to clarify, my strategy isn’t to rent out bedrooms in a big single-family house. I’m mainly focused on buying a small multifamily (2–4 units) where I can live in one unit and rent out the others. I want something that builds long-term equity and cash flow while still being manageable.

That said, I’ve noticed it’s really tough to find good 3–4 unit deals around DFW where the rents still cover the mortgage, taxes, and insurance. From your experience:

• Which areas around DFW still make sense for small multifamily?
• When inventory and numbers are this tight, would you recommend starting with another type of property (like a single-family with an ADU or duplex conversion) just to get started?And in this market, what would you personally consider a “good deal” in terms of cash-on-cash or cap rate?

Which areas around DFW still make sense for small multifamily?

When inventory and numbers are this tight, would you recommend starting with another type of property (like a single-family with an ADU or duplex conversion) just to get started?And in this market, what would you personally consider a “good deal” in terms of cash-on-cash or cap rate?

Also curious if you’re seeing more investors shifting from multifamily to single-family now because of pricing.

Appreciate your insight — I’m learning a lot from your experience and trying to approach this the right way from day one.