What do you mean by "the numbers"?

Question

When an investors locates a property and they state they have to "run the numbers", what numbers are you actually referring to? NOI? Is that the only number that matters to move forward with a deal?

Theo Hicks · Answer

@Latisha Haynes "Running the numbers" basically means that your analyze the deal to see if it meetings your deal requirements (investing goals). If you go to the "tools" tab, you can find the House Flipping, Rental Property, & Wholesaling.

I used the Rental Property Calculator to create my own offline excel document to run the numbers. In my case, I insert the property details (purchase price, income, expenses) and it spits out a cash-on-cash return on investment. If this ROI meets my requirements, the deal passes. If not, then the price is too high, the rents are to low, etc.

If you are doing a flip, you would use similar numbers, but the calculation would be a little different.

Hope this helped. Let me know if you have any questions!

Linval T. · Answer

@Latisha Haynes- As @Theo Hicks rightly explained the calculator is the tool of choice for the initial litmus test to ascertain if it's a deal or not.

Below, is the link for the calculators.

https://www.biggerpockets.com/real-estate-investme...

Latisha Haynes · Answer

@Theo Hicks thank you very much for your response.  I wanted to make sure I was on the right path.