Part 3 - Behind the Screen: Mastering Desktop Analysis for Property Deals

Congratulations! You've made it past the initial hurdle of cold calling and have piqued the interest of a potential seller. But before you jump headfirst into negotiations, it's time to conduct some crucial desktop analysis to evaluate the deal's viability.

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First things first, let's rewind a bit. During your conversation with the seller, you should have gathered essential information to gauge their situation. Ask about their motivations for selling, their desired timeline, the condition of the property, and if they have a ballpark figure in mind for the sale price. These details provide valuable insights into the seller's mindset and help you tailor your approach accordingly.

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Now, onto the desktop analysis. You'll want to start by gathering information about the property from reliable sources like Zillow, Redfin, or specialized real estate software. Take note of key details such as the property's size, condition, and location.

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Next, it's time to dive into comps – comparable properties in the area that have recently sold or are currently on the market. This step is crucial for determining the property's After Repair Value (ARV), which serves as the foundation for your offer.

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A handy reference for comping houses is "Straight Outta of Compin'" by Jamil Damji, available on YouTube. By analyzing comps and considering factors like market trends and neighborhood dynamics, you can arrive at a rough estimate of the property's ARV.

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Once you have a ballpark figure for the ARV, it's time to crunch some numbers. A common rule of thumb is to offer around 60% of the ARV, adjusting as necessary based on the property's condition and market conditions. In a hot seller's market, you may need to offer closer to 70%, while in a slower market, 50% might suffice.

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From this figure, subtract estimated repair costs and your desired assignment fee to arrive at your maximum offer price. This high-level analysis should give you a basic idea of whether the seller's asking price aligns with your investment criteria.

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Keep in mind that this desktop analysis is just the first step in evaluating the deal. Depending on your level of experience and the systems you have in place, you may choose to proceed in different ways. You could attempt to put the property under contract based on your analysis, or you might opt to send someone to physically inspect the property before making a decision.

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Regardless of your approach, remember that the desktop analysis sets the stage for follow-up conversations with the seller. If wholesaling is your goal, your objective is to secure the property under contract at a price that allows for a profitable assignment to another buyer.

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However, it's essential to exercise caution and conduct thorough due diligence before moving forward. Remember, you won't have a buyer lined up if the deal doesn't stack up, so it's crucial to understand the steps involved and do right by all parties involved.

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In conclusion, desktop analysis plays a crucial role in real estate investing, providing valuable insights into the viability of a potential deal. By leveraging market data and crunching the numbers, you can make informed decisions and set yourself up for success in the competitive world of property investment.

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