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Updated over 6 years ago on . Most recent reply

User Stats

35
Posts
60
Votes
Jameson Hooton
  • Omaha, NE
60
Votes |
35
Posts

Favorite method for analyzing a deal

Jameson Hooton
  • Omaha, NE
Posted

I’m curious about the various approaches to analysis out there.  Every book I’ve read describes the math a little bit differently, or focuses on different elements. 

For example, Brandon Turner's book says that ignoring maintenance and capex is one of the main reasons that people fail, but David Greene's BRRRR book's section on analysis (if I remember correctly) didn't mention maintenance or capex in the numbers.

Or, another example:  Brandon Turner loves cash-on-cash return, but Paula Pant doesn’t like that metric and prefers to look at Cap Rate. 

Some people, like Paula Pant, seem to imply that hitting the 1% rule should guarantee decent cash flow and a property worth buying, but other analysis methods make me think 1% is too skinny of a deal. 

I’d just love to hear about what approaches work for you.  What do you include in your math.  What metrics mean the most to you.  Thanks!

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