Here’s how a millionaire real estate investor dissects a deal

Here’s how a millionaire real estate investor dissects a deal

Dissect defined: To cut up methodically in order to study its internal parts. This is what we're going to do to demystify real estate investing for you. Here's how we dissect deals.

Start with the end in mind

Ask yourself, What is the objective of this exercise?

Objective

To determine if the deal meets your desired profit goal

If so, the deal is worth investigating further and getting under contract ASAP. If not, politely pass on the deal & it’s on to the next deal! Keep in mind we dissect about 50 deals for every 1 deal we buy. It's a numbers game!

Steps

Look at the property

Preferably by walking it in person. BUT, If you can’t walk the property in person, you'll need to look at pictures and videos of the property. The more pictures and videos the better! This will help you on the next step which is...

Estimate the repair costs.

Don't worry about this being super accurate right now. You're going for a ballpark figure.

Google the property address

Open New tabs for the first 3 real estate websites you see: IE, Zillow, Realtor.com, Redfin, Trulia, Coldwell Banker etc

Notate the estimated property value.

The estimated property values provided by RE websites like Zillow can sometimes be spot on, and sometimes they can be off by a little or a lot. Don’t worry about their accuracy right now. You're investing in collecting data. Wall Street types call this due diligence. You’ll need this property value info later.

Run comps

Go to www.politepropertydata.com to sign up for a 14 Day Free Trail of the software we use to run comps

Residential real estate values are determined by the value of recently sold similar properties. Similar bedrooms, bathrooms, square footage, that have sold within a 2 mile radius with the past 6-12 months.

Not all comps are created equal. Therefore you must know how to analyze comps.

There are 2 main types of comps:

But, the first step to analyzing comps is to look at the pictures.

Looking at the pictures will allow you to determine what type of comp it is quickly:

1-As Is comps: these are comps that have not been renovated within the last 12 months. These comps look outdated. The old carpet, wood paneling, kitchen and bathroom look old and tired. The property advertisement may even say "needs updating". These comps typically sell at or below the fair market value of the neighborhood. Why? Because they need work and are not brand new.

2-ARV comps: After Repair Value comps are comps that have been renovated and flipped within the last 12 months. These comps typically are listed for and sell for top dollar.

The more comps the better. Our motto is: In God we trust, all others bring data.

Next step:

Log into Flip Hub (flipping software)

This is where the rubber meets the road!

Sign up for a free 14 day trial of Flip Hub here:

https://app.myfliphub.com/register

Step 1: enter ARV-After Repair Value aka what the property will sell for once renovated

Step 2: enter the purchase price (use the seller's asking price for now)

Step 3: enter estimated repair cost (in our training program we teach how to quickly estimate repair costs without being a contractor)

Step 4: enter fixed costs

Which consists of: buying costs (typically 2-3% of purchase price

Holding costs (Costs you incur while renovating the property, utilities, taxes, insurance etc)

Selling costs (Realtor commission, attorney fees, transfer taxes)

Step 5: enter financing costs. If you use your own Cash your financing costs will be $0. But if you use OPM like we often do, you'll pay interest on the money you borrow to do the deal. We typically use either seller financing, private lender financing or hard money, or a combination of the 3 to do our deals with little to none of our own money out of pocket. This is what the top to bottom ROI analysis looks like

Step 6: Analyze projected profit

Step 7: Analyze maximum purchase price

This video breaks the entire process of dissecting a deal down from start to finish. Our team dissects tons of deals every week. On average, with all the information needed, our team can dissect a deal in 5 minutes or less. This allows us to move with speed and decisiveness. For example, just last week, we got a lead from a wholesaler, did a walkthrough inspection with our GC, analyzed the deal, secured $175K in funding from a private investor, and locked up the deal under contract, ALL WITHIN 12 HOURS! This one deal will net us a $70,000 profit. Using our proprietary system, you can do the same thing.

Once you learn how to properly dissect deals you’ll be light years ahead of other investors in your market and well on your way to winning more deals and creating the life of your dreams.

We’re hosting a LIVE UNCUT Free Event on Wednesday, December 28th at 8:30pm ET breaking down how to dissect deals for maximum profit without using any of your own cash or credit.

Don’t miss your chance to see us unveil this hidden wealth-building strategy LIVE!

You’ll even be granted access to an open Q&A after the event.

Space is limited. Click the link below to reserve your spot!