Article Side

Online Article Directory!

Hello Guest! Login or Register to submit articles!

How to Determine if a Deal is Good for Real Estate Investing

By Simon Macharia Subscribe to RSS | March 13th 2012 | Views:
loading
 
  



Being able to recognize a good deal is crucial to the success of a in real estate investing business. While you may come across so many properties for sale, not all of them qualify as profitable real estate investments.

So which ones are good and which ones are not?

The key to successful real estate investing is following a business model that you understand. Whether you wholesale properties, do lease options, fix and flip, keep as rentals, etc, you must develop ball-park figures that help you determine whether you have a deal or not.

The following 3 steps apply when analyzing your deals:

1) Pre-screen your sellers

Of course, you must properly pre-screen your sellers so that you have all the information you need to do your numbers. It is important that you invest in a real estate investor website that helps you pre-educate motivated sellers, pre-screen them and pre-negotiate with them.

Once you receive the seller information, you can quickly tell if you have a deal or not.

If you end up pre-screening them over the phone, a simple script with the proper questions should help you get all the information you need to analyze the deal.

2) Run comparable sales

You then need to determine how much the house would cost TODAY if it was sold in perfect condition.

3) Analyze your offer

Armed with this information, you can then determine if you have a deal or not. Of course, you must have the mortgage balance and asking price to do this.

a) Wholesale deals

To qualify as a wholesale deal, you should buy the house at a maximum of 70 cents on the dollar minus repairs. Try to target 65% minus repairs in a poor real estate market.

You must also calculate your profit in this calculation. For example, if you want to make $5000 in the deal, your buying price should be 65% minus repairs minus $5000.

You have to remember that the lower your buying price, the lower you can flip it and the faster you can sell it.

b) Rentals and lease options

If the house needs no repairs and does not qualify as a wholesale deal, then it probably qualifies as a good deal for rentals and lease options.

You must therefore know the rental rates in the area. Obviously, the monthly mortgage payment must lower than the rental rates for this to be a viable deal. This means if the rent is $1500 per month, and the mortgage payment is $1150, then you should have at least $350 in monthly cash flow.

You can use rental rates to determine your cash flow; however you can get better cash flow with lease options.

Remember you still need equity in these properties because you will need to cash out in the future.

c) Short sales

A short sale is viable if none of the options above cannot work and the mortgage payments are late.

You can get better results with properties with more than one mortgage.

We have covered short sales in separate articles.

Simon Macharia - About Author:
Be sure to visit our blog to learn more about techniques and strategies for real estate investing. Learn how you can increase your profits with an automated website for real estate investing that makes you close more deals using less time, money and effort.

Share on Facebook Tweet It Stumbleupon this post This post is delicious !

Article Source:
http://www.articleside.com/real-estate-articles/how-to-determine-if-a-deal-is-good-for-real-estate-investing.htm

Related Real Estate Articles Subscribe to RSS

Are you searching for real estate project in Bhopal?
Published by Manish Kumar on June 14th 2012 | Real Estate
Many homebuyers sometimes get confused about buying a new home or apartment. They think that waiting...
 
Real estate investment at Riggsbee Farm
Published by Steve Elloy on January 17th 2012 | Real Estate
The bankrupt economy of Greece and the clueless future of the EU have taken the international market...
 
Investment options in residential sector of real estate
Published by Deepti on May 10th 2012 | Real Estate
Residential real estate in India is a booming industry and attracts investors from different parts o...
 
Economic real estate deals and estate agents
Published by Glyn Jones on December 3rd 2011 | Real Estate
The online estate agents turn out to be an economic alternative with reality dealings but they being...
 
Bangalore patrons looking for higher returns in Real estate with no risk
Published by Prop Tiger on June 11th 2012 | Real Estate
The stock markets tanking and therefore the rupee depreciated against the dollar appear to be daily ...
 
Benefits of hiring an experienced real estate agent
Published by Deepti on April 17th 2012 | Real Estate
Selling or buying a home is probably the most significant financial decision that an individual make...
 
Real estate agents for your property needs
Published by Glyn Jones on June 4th 2012 | Real Estate
The estate agents can help find the right kind of properties that suits your specific requirements a...
 
Useful tips and guidelines on real estate investments
Published by Adrian on July 30th 2012 | Real Estate
People who are not experienced and inactive in the real estate business, the process of selling and ...
 
Hire estate agents Marlow for smooth property deals
Published by Ricky Charles on January 4th 2012 | Real Estate
Many businesses have flourished and doomed but the real estate business has somehow managed to keep ...
 
Lease/Tenancy options for better dealing in real estates
Published by Jane Cyrus on February 13th 2012 | Real Estate
One of the best options of doing property dealing is a Leasing. With help of this beneficial option,...
 
Real estate – Definitely a money-spinning investment
Published by Deepti on May 22nd 2012 | Real Estate
Nowadays people have become cautious that living at own home is far better than a house on rent. It ...
 
 
Options for a real estate
Published by Loo821ql on February 26th 2012 | Real Estate
If you are learning how to be a registered realtor or simply would like to know more about real esta...
 
It’s time to go with real estate India again
Published by Mike Nicholson on May 4th 2012 | Real Estate
Those days are gone when real estate in India was not a lucrative sector. Today, it has developed in...
 
Beverly Hills real esBeverly Hills real estate agent is simply the finest picktate agent is simply the finest pick
Published by Jim Corbet on June 7th 2012 | Real Estate
Beverly Hills real estate agent is considered to be the best when it comes to offering the finest de...
 
Explore real estate companies for housing accommodations
Published by Abhay Singh on December 30th 2011 | Real Estate
We have to move to many places in our entire life span, sometimes in search of better education, som...
 
Get reputable estate agents to invest in realty sector
Published by Glyn Jones on January 19th 2012 | Real Estate
Estate agent will be the only professional who is able to aid you in locating a best accommodation a...
 
Real estate in India- an ideal destination
Published by Deepti on April 16th 2012 | Real Estate
The real estate of the country significantly contributes to its economy. The Indian realty contribut...
 
 
Consult an expert only to ensure best real estate investments
Published by Jennytoedt on April 17th 2012 | Real Estate
Escalating estate prices have given good returns to its customers, provided the property has been ch...