Deal Analysis

How To Assess Your Real Estate Deals

We found a really good video  on how to analyze your investment deals. It is really important  to do your due diligence  in: researching, planning, and analyzing an investment prior jumping into a deal. You always have to plan for a worse case scenario. It is very important to have multiple exit strategies when investing because you never want to get stuck in  a bad deal without an exit strategy.

Key take-aways:

Here are a few calculations that will help you analyze deals:

NOI ( Net Operating Income): Total Annual Income- Annual Expenses

ROI ( Return On Investment): NOI/ Total Amount Investment

Total Annual Income ( Rent)

Annual Expenses ( These are monthly expenses :  Closing cost, Taxes, Insurance, Mortgage, maintenance cost, etc.)

Total Amount Invested ( Ex. Down Payment, rehab cost, etc)

It is really crucial to never underestimate your annual expenses.   If  you miscalculate you annual expenses, it can total throw off your NOI which will directly affect you ROI. It is  a shrewd idea  to overestimate your expenses .  It is better to overestimate  rather than underestimate your expenses. Don't try to force a deal by fudging your numbers. It will only hurt you in the end.

 - Auben Realty Improving Augusta One Home At A Time