Detailed Analysis: When to Perform?

4 Replies

Hello all, regarding deal analysis I have a question regarding the process; more specifically, when to perform a detailed analysis (before or after an offer has been made?). I assumed it would be BEFORE, however, I am currently reading Brandon Turners "The Book on Rental Property Investing" and it seems that doing the full detailed analysis based on inspecting documents provided by the seller is completed in the due diligence phase of the deal AFTER the offer has been made. So basically, an offer is made based on estimated comparable data you find on your market beforehand and what's provided by the agent then the specifics are determined after the offer has been made? Any insight would be appreciated.

You want to create some sort of analysis before you make an offer. Then once under contract you just verify all of the numbers that you estimated. 

Howdy @Dominick Tanella

Your assumption is correct.  I actually use a 3 step analysis process.  5 minute analysis based on listing.  Looking to see if property meets 1% and 50% rules, and if there is significant repairs needed.  If it passes this quick look, then, I dig a little deeper.  I work up a Proforma analysis based on previous research and what I can get from the listing agent.  If it’s still a go, and the offer accepted, I’ll do a detailed analysis during the due diligence period.

Ok great thanks a lot for clarifying. I thought so but wanted to confirm for reassurance. I have been making the 50% and 1% calculations as well but I haven't spoke to an agent yet. Looking to do so shortly. Thanks again for your responses.

@Dominick Tanella   Agree with previous posters, you always want to complete your deal analysis prior to property purchase. If you can, some inspections too, to avoid any major repairs or to exclude in purchase price.

The idea is to avoid "paralysis of analysis" if possible.  This can happen because you won't have 100% of the data you need to make a PERFECT decision on any deal, but you'll have a good part of it if you do due diligence and get past history / expense records etc from the seller of the property.  I am going to send you a private message .  . . 

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