How To Evaluate Real Estate Investing
How To Evaluate Real Estate Investing
How To Evaluate Real Estate Investing
To succeed in real estate investing, you must evaluate your deals ensuring you can make a profit.
Learning how to evaluate your deals is therefore necessary no matter which type of business model you adopt.
The article teaches you tips of evaluating your deals so you make offers that make you money.
Obviously the way you evaluate your deals depends on your business model.
So in this article we will look at some general scenarios which should be a rough guide as to how you make your offers.
Let us look at a few real estate investing business models:
1) Wholesale real estate investing
When you flip to other real estate investors, the general rule is to buy at 65 cents on the dollar minus repair costs minus your profit.
In other words you must leave enough money on the table for your real estate buyer or nobody will be interested in it.
Secondly, you must take your profit into consideration. This means that your profit after you flip the deal must be taken into consideration before you buy. Otherwise you will not make any money or you will be unable to flip it because it will not have any profit potential for the real estate investor.
In the current low real estate market, I prefer to go below 65%. Lower is always better.
2) Buy fix and sell
This works like wholesale real estate investing, without thinking about flipping profit.
Since you sell properties at a discount when the market is poor, I still recommend you use the formula for wholesale real estate investing.
3) Subject to's and lease to own real estate investing
You can afford to buy properties at a higher price when taking over payments.
Some people will argue you can still make money with not equity; however, my best advice is to stay out of it.
When you take over payments, the perfect scenario is when you make money when you acquire the property, get a positive cash flow each month and cash out with a big pay day.
Cashing out means your lease to own buyer refinances and owns the property.
The price when your lease to own buyer refinances must therefore be acceptable by lenders.
You must therefore buy houses with equity in a downward real estate market. This will cushion you if the market goes down.
More so, these properties should not require repairs and should have at least 25% equity.
4) Rentals
The general rule of thumb for rentals is that your buying price divided by your yearly rent is less than 10. The less the better. Of course this is assuming there are no repairs needed.
Save Money Using Home Remedies For Hair Fall ! Modern Kitchen Renovation Making Your Bathroom Fun With Funky Shower Curtains Is It Worth To Spend Money On Patio Door Blinds? RSS Feeds: Website Owners' Secret Weapon Positive aspects of FSBO Real Estate Contract Mobile Homes and Their Advantages Tips to Making an Offer to Purchase a Home Complete Home Surveillance Systems How to Start Your Own Mini Garden in Your Kitchen Get the Most Out of a Parma OH Property Inspection by Asking These 5 Questions, by Real Estate Expert Michelle Actual Estate Math - Do You Know These Straightforward Formulas? Home page is like a kernel of a Website