TOOLS & RESOURCES

Comping Guide and Quick Reference Sheet

Repair Estimator Spreadsheet Template

Deal Analyzer Spreadsheet


ANALYZE THE DEAL

Now that we have talked about how to set up your business and effectively start generating seller leads, it’s crucial that we talk about how to analyze the deal.

This is one of the most important steps in the lifecycle, but is also an in-exact science. What I mean is that absolute precision hampers your results and getting stuck here kills deals.

The old adage “paralysis by analysis” exists for a reason and I don’t want you getting stuck on this step. You want to run the numbers several times for several different scenarios but, at the end of the day, if you aren’t making offers as a result of your due diligence, you’re not going to get anywhere.

So let's get into talking about how to comp, analyze, and inspect properties.

COMP

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Comparables, or comps as they are called in the industry, are homes in the immediate area that are similar to the property you are evaluating.

Generally you want to pull comps on a property that tell you what it’s currently worth and then pull a set of comps that tell you the After Repair Value (ARV) or what it will sell for once it’s fixed up.

Comping is part science, part gut instinct, so I’ve put together a guide and quick reference sheet that explain how to do it right.


INSPECT

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The next step in analyzing the deal is to inspect the property. Once you have the comps in hand and you’ve done some research on the property it’s time to meet the seller or real estate agent and inspect the property.

Most people assume that you have to be a contractor to get this part right. While being a contractor is certainly an advantage, it’s not a necessity.

At this stage, you are looking to get a ballpark figure on the necessary repairs to the property. You don’t need to get an exact, to the cent, budget to repair the property yet. A lot of repairs can be grouped together and generally cost about the same across the country with minor adjustments for your local market.

With the right template, you’ll know exactly what to look for and generally what the repair costs will be for your property. I built such a template for you based on our user’s favorite Leadflow tool, the Repair Estimator. You can download and print out your own copy above.

ANALYZE

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The final step of Analyzing the Deal is to use all the information you have gathered to calculate your Estimated Net Profit and your estimated Return on Investment (ROI).

This involves looking at your Sell Price, Work Needed, Holding Costs, and your Buy Price to determine if there is enough room in the deal to make a profit.

I’ve put together a comprehensive deal analyzer spreadsheet that you can download above that is based on our Deal Analyzer calculator inside Leadflow.

If you’re new, once you’ve run the numbers it’s important to run it by someone that you know and trust that knows the real estate investing industry. This could be an investor or a real estate agent you have met while networking.

Once you’ve gone through and analyzed the deal and determined it could be profitable, it’s time to Make the Offer. We’ll talk about that more in our next email.


DISCLAIMER

These documents and information contained herein are designed to provide accurate and authoritative information with regard to the subject matter being covered. It is given with the understanding that the authors and distributors are not engaged in providing legal, accounting, real estate or other professional advice.

If legal advice or other expert or professional assistance is required, the services of a competent professional person licensed in your area should be sought.