What is a good deal/bad deal when number looks similar on paper?

[Eagle Yeh]

Hi,

I have a newbie question on analyzing a deal. How do you process properties that look similar on paper when analyzing cash flow? I am practicing the suggested steps to analyze 5 deals a day from properties on MLS (I use Zillow and house sigma).

What I find was that there were often times that properties look similar on paper (similar sell price, similar rent, similar house condition, and age). They usually turn out similar on paper in cash flow. When it comes to this situation, do you just offer one to "bias for action"? Do good deals come in similar observation? or good deals are just not readily available on MLS usually.

Thanks,

[Tom Wagner]

Good question. In all the deals I've looked at I've never seen two that are exactly the same. Some differences to consider:

* Interior finishes

* Exterior finishes

* Sqft, bedroom count and bathroom count

* Floor plans

* Ability to add a bedroom

* In-place taxes and rents

* Year built

* What street each property is on / what submarket it is in

* Whether it has parking

* Landscaping

* Immediate neighbors

* Proximity to transit, schools or parks

More often than not it will become clear which property is better the deeper you dive into your analysis. And in my analysis I index/focus heavily on the neighborhood street of each property, as I am investing for appreciation instead of cash flow.