Starting the Analysis Phase of RE Investing

Lender · Austin, TX · Member since 2021 · 447 posts · 441 votes

2y

Bart, it just depends on what your investing strategy and your priorities are. As a first-time investor, I suggest looking for turnkey rentals in high cash-flowing states (mainly the Midwest). This is because many new investors get way over their heads with rehab, and I think it's best to fully understand one aspect of real estate investing (ex., rentals) before branching out and learning another aspect (rehabs/BRS). You likely will not be looking to make an appreciation play as you need a solid cash flow foundation to support those kinds of investments.

Once you narrow down what markets fit your strategy, I suggest working with an investor-friendly realtor in the market to narrow down on the submarkets you want to purchase in. Analyze enough deals to determine when a deal is abnormally good for the area, and you'll be able to recognize opportunities as they come.

1 Reply

Austin McClainBusiness Member

Real Estate Agent · OH · Member since 2021 · 347 posts · 602 votes

2y

I use the bigger pockets calculator to run numbers and like it a lot. To know the areas that you're not from, network with locals and watch what sells and how quickly to see how hot each area is.

[email protected]614-710-4827

3 Reply

Samuel DioufBusiness Member

Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes

2y

Like what Austin said, I would use the BP calculator. Another important factor is to know the grade of the neighborhood given property is in. Speak to other investors who know the area well and ask them for advice. I can send you a graded map of Ohio!

[email protected]614-662-1652

Reafco - Samuel Diouf528 Reviews

Website View Page

4 Reply

Remington LymanBusiness Member

Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes

2y

Quote from @Bart Van Leijsen:

Good evening fellow Biggerpockets people!

Can someone give me advice on how they started analyzing deals in certain markets? I have been reading a lot of books but feel overwhelmed with all the information out there. We are hoping to put our house on the market next month and make a significant profit, which we would like to invest in an investment property.

I work in CRE in a lending role and my dream is to one day become a developer / investor.

Property Type: Small MF / SFR

Markets: Colorado Market, Columbus / Cincinnati or Madison/Ridgeland, MS where we currently live. (looking around in the MS area to buy a property that needs some rehab and a motivated Seller)

Key Aspects on location: Large universities / Hospital System / Crime / Retail situation in the nearby area.

A little direction to how some of you have started analyzing deals and targeting your markets would be very helpful as my next goal is to start analyzing at least 3/4 properties a week.

Would like to connect with many of you and let me know how I can help with any questions in regards to Commercial Real Estate.

Thanks in advance!!

you could use the BiggerPockets calculator

I did not analys deals until I got to 10 doors in Columbus, Ohio. Just buy and hold

[email protected]614-541-8475 Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals

Reafco512 Reviews

Website View Page

3 Reply

Adam M.

Investor · Texas (DFW & West Texas) · Member since 2023 · 86 posts · 55 votes

2y

@Bart Van Leijsen I remember when I underwrote my first deals years ago it was overwhelming... I know the exact feeling you are talking about!

The best thing I personally found that helped was to:

1. Choose one underwriting template spreadsheet/calculator (you can find many online, I see some in this thread have referenced the BP calculator).
2. Then take some time to write down the main metrics that will pertain to what you are doing. In some cases you do not need all of them at all. Some of these templates (that's exactly what they are... templates!) can be overwhelming because they include things like a "Monte Carlo Simulation" or "Sensitivity Analyses"... just get a grasp of the fundamentals like cap rates etc. and go from there.
3. Build your own excel spreadsheet. This is the best way to learn the process. I know some other investors like to delegate underwriting/use online templates but honestly, just building something basic and adding on to it will teach you how the numbers work with each other and what each term really means. There is no other way to learn the business as numbers/underwriting is one of the pillars of CRE.

Of course this will take time. Please understand there is no "overnight" solution and it is a skill set that will flourish as your experience as an investor compounds; which it sounds like you are on your way to doing!

Hope this is helpful.

Oh another bonus point: You can save yourself lots of time but not underwriting every single deal at high fidelity. Know your buy box and if a deal doesn't fit... why underwrite it? You can save yourself so much time this way. Also I would create a "back of the envelope" tab in your excel spread or as some other investors like to call it "Quick n' Dirty"... This is a very basic calc that will let you know if 15 minutes or less if a deal is a winner or not. If you are interested then it's time to dive in!

Happy underwriting 🖊️

1 Reply

Sam McCormackBusiness Member

Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes

2y

Quote from @Bart Van Leijsen:

Good evening fellow Biggerpockets people!

Can someone give me advice on how they started analyzing deals in certain markets? I have been reading a lot of books but feel overwhelmed with all the information out there. We are hoping to put our house on the market next month and make a significant profit, which we would like to invest in an investment property.

I work in CRE in a lending role and my dream is to one day become a developer / investor.

Property Type: Small MF / SFR

Markets: Colorado Market, Columbus / Cincinnati or Madison/Ridgeland, MS where we currently live. (looking around in the MS area to buy a property that needs some rehab and a motivated Seller)

Key Aspects on location: Large universities / Hospital System / Crime / Retail situation in the nearby area.

A little direction to how some of you have started analyzing deals and targeting your markets would be very helpful as my next goal is to start analyzing at least 3/4 properties a week.

Would like to connect with many of you and let me know how I can help with any questions in regards to Commercial Real Estate.

Thanks in advance!!

Cincinnati fits all those boxes well! Big hospitals, a few big colleges, crime rate lower ( in certain areas, some aren't good. Just like all cities), etc

[email protected]859-443-4952

Sam McCormack Realtor

View Page

2 Reply

Bart Van Leijsen

OP

Banker · Member since 2023 · 26 posts · 12 votes

2y

Quote from @Sam McCormack:

Quote from @Bart Van Leijsen:

Good evening fellow Biggerpockets people!

Can someone give me advice on how they started analyzing deals in certain markets? I have been reading a lot of books but feel overwhelmed with all the information out there. We are hoping to put our house on the market next month and make a significant profit, which we would like to invest in an investment property.

I work in CRE in a lending role and my dream is to one day become a developer / investor.

Property Type: Small MF / SFR

Markets: Colorado Market, Columbus / Cincinnati or Madison/Ridgeland, MS where we currently live. (looking around in the MS area to buy a property that needs some rehab and a motivated Seller)

Key Aspects on location: Large universities / Hospital System / Crime / Retail situation in the nearby area.

A little direction to how some of you have started analyzing deals and targeting your markets would be very helpful as my next goal is to start analyzing at least 3/4 properties a week.

Would like to connect with many of you and let me know how I can help with any questions in regards to Commercial Real Estate.

Thanks in advance!!

Cincinnati fits all those boxes well! Big hospitals, a few big colleges, crime rate lower ( in certain areas, some aren't good. Just like all cities), etc

Thanks Sam! Any particular areas that you would recommend looking at?

0 Reply

Bart Van Leijsen

OP

Banker · Member since 2023 · 26 posts · 12 votes

2y

Quote from @Adam M.:

@Bart Van Leijsen I remember when I underwrote my first deals years ago it was overwhelming... I know the exact feeling you are talking about!

The best thing I personally found that helped was to:

1. Choose one underwriting template spreadsheet/calculator (you can find many online, I see some in this thread have referenced the BP calculator).
2. Then take some time to write down the main metrics that will pertain to what you are doing. In some cases you do not need all of them at all. Some of these templates (that's exactly what they are... templates!) can be overwhelming because they include things like a "Monte Carlo Simulation" or "Sensitivity Analyses"... just get a grasp of the fundamentals like cap rates etc. and go from there.
3. Build your own excel spreadsheet. This is the best way to learn the process. I know some other investors like to delegate underwriting/use online templates but honestly, just building something basic and adding on to it will teach you how the numbers work with each other and what each term really means. There is no other way to learn the business as numbers/underwriting is one of the pillars of CRE.

Of course this will take time. Please understand there is no "overnight" solution and it is a skill set that will flourish as your experience as an investor compounds; which it sounds like you are on your way to doing!

Hope this is helpful.

Oh another bonus point: You can save yourself lots of time but not underwriting every single deal at high fidelity. Know your buy box and if a deal doesn't fit... why underwrite it? You can save yourself so much time this way. Also I would create a "back of the envelope" tab in your excel spread or as some other investors like to call it "Quick n' Dirty"... This is a very basic calc that will let you know if 15 minutes or less if a deal is a winner or not. If you are interested then it's time to dive in!

Happy underwriting 🖊️

Thank you Adam! I feel like I should target a certain city/area and start analyzing the numbers.

I have built a model for large commercial developments before at work. Going to built of that for an investment property.

How did you find your first properties to analyze?

0 Reply

Bart Van Leijsen

OP

Banker · Member since 2023 · 26 posts · 12 votes

2y

Quote from @Samuel Diouf:

Like what Austin said, I would use the BP calculator. Another important factor is to know the grade of the neighborhood given property is in. Speak to other investors who know the area well and ask them for advice. I can send you a graded map of Ohio!

Thank you Samuel! That would be very helpful as I would be an out of state investor. Any data will help targeting certain areas. Do you invest in OH?

1 Reply

Starting the Analysis Phase of RE Investing

Starting the Analysis Phase of RE Investing

Most Popular Reply

9 Replies