Hello! My name is Jovelyn & am new to BP! I am from San Diego, CA & heard from commercials on the Bigger Pockets Podcast, that this weekend from March 12-14th is the “All You Can Analyze Weekend” where all members of the Bigger Pockets App will have Unlimited Access to the Rental Property Calculator. I have never used it, nor have I began Analyzing Deals just yet. I am interesting in eventually House Hacking a Duplex or Triplex in the future to dip my feet into Real Estate Investing. Any ideas on how I can beat Utilize this tool this weekend? Steps on any info on this or your experience would very much help! Thank you in advance!
I think it is a great idea to familiarize yourself with the purchase calculator you are going to use prior to actually needing it. In a hot market like San Diego you sometimes have to move quickly. In the frenzy of making an offer on a good property is not when you want to be trying to figure out a calculator or becoming knowledgeable about any part of the process.
Do you have a realtor? Ask them for listings of duplex to quad and enter the data in the calculator. I am not a fan of cap ex/maintenance being a function of the rent, but many calculators do it that way. Pay particular attention to how far the cash flow projection is from the 50% rule. The 50% rule is conservative in high rent markets where there is no HOA or Melo Roos, but it is not super conservative. Basically, if you are going to practice, you might as well practice on real properties provided by your agent.
Do not be surprised if the initial cash flow projection looks terrible. Most San Diego properties have poor initial cash flow (i.e. negative). The more units on the property, in general, the better the cash flow. Be aware that harder to manage areas (lower class areas) will typically project better cash flow from these calculators. My view is that if that cash flow is obtained in that area, it is obtained via extra work and expertise. So the result of a cash flow calculator is best when compared with similar properties.
Run as many properties as it takes to have some confidence that when you need to run the numbers you will be able to do it quickly and with confidence.
My last acquisition, I did not do any pro forma calculation (return projection). I knew it was meeting my numbers without having to run the calculation. This was partly due to it being an outstanding deal and partly due to how many properties I have evaluated over the last few years.
At any time prior to when you actually are seriously looking you will want to familiarize yourself with the process to the best you can. You do not want to be figuring this out when there is a hot property that you want. This could include becoming familiar with the standard offer document, the escrow process, etc.
A good agent will help you with the process when the time comes, but it is best to be as educated as possible about the process prior to needing that knowledge.
Welcome to the BP community! Great that you joined the site!
Read Beginner’s Guide to help you get started: http://www.biggerpockets.com/real-estate-investing
I hope BP helps you achieve your goals!
Hi Dan! I appreciate all the feedback! I will definitely keep these things in mind. I want to meet/get to know more people wanting to get involved in house hacking in San Diego County & any real estate investors that have had experience! Analyzing deals is a little intimidating, which is what scares me but that I feel is the most important. Thank you so much! Looking forward to getting into this!
@Dmitriy Fomichenko Hello Dmitriy! Thank you for getting back to me! I have been meaning to look over that beginners guide & will definitely take a look!
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