Analyzing my first deal!

7 Replies

Hey BP! Just walked through my very first property as s potential first deal! It is however, a bit different. I do like it because it was a single family home but it is laid out as a perfect multi-family. A kitchen, two bedrooms and a bath identically laid out on both floors. It even has potential living space above a detached two car garage. Anyway... What is the best guide for analyzing my first property? What red flags would there with this if any?? What is the best way to figure out if the asking price is even close to being reasonable? I am also just looking for other general advice in analyzing my first property. It is in the Hampton Roads region of Virginia, Portsmouth to be specific. Thank you all in advance for your continued support!!

@Tim Kelly , welcome to BP.  I am still relatively new at this also so the best advise I can give is to read everything you can on this site using key search words "multi-family", "rental", "cash flow" and "analyze rentals", etc. 

Check out the Analyze drop down menu above for other tools.

Below are some hopefully helpful links:

The Ultimate Beginners Guide

http://get.biggerpockets.com/beginner/

The Ultimate Guide to Analyzing Rental Properties

http://www.biggerpockets.com/renewsblog/2014/09/28...

Your Complete Guide to Analyzing a Property in Just 10 minutes

http://www.biggerpockets.com/renewsblog/2014/10/20...

Good luck,

Cheryl

Besides the zoning, which seems to be the biggest potential obstacle, are the utilities separated or how easily could they be? Expenses are probably 50% of rents. Take gross rents, subtract expenses (insurance, taxes, maintenance, lawn, property management (must include even if managing yourself) etc. then subtract mortgage. That's how much you'll have left over for monthly cash flow.

Figure out what the rents are in the area by looking at other listings and talking to a property manager in the area.

Good luck!

Originally posted by @Greg W. :

Besides the zoning, which seems to be the biggest potential obstacle, are the utilities separated or how easily could they be? Expenses are probably 50% of rents. Take gross rents, subtract expenses (insurance, taxes, maintenance, lawn, property management (must include even if managing yourself) etc. then subtract mortgage. That's how much you'll have left over for monthly cash flow.

Figure out what the rents are in the area by looking at other listings and talking to a property manager in the area.

Good luck!

 Hey Greg,

Thanks a lot! These are things I am slowly learning about! Is there a practical approach to looking at other listings? Which database do you use if you cannot access MLS?

Thanks again!