There’s one big question we’re aiming to answer during the 24-week challenge. How do real estate investors build real wealth and freedom without access to millions of dollars in capital?
We’re on week 11 of the challenge, and Zack Childress is guiding us through the steps to get to the answer. This week’s topic is Researching and Analyzing Properties.
We’re talking about running the numbers on fix and flips. ARV (after-repaired value) tells you what property might sell for. Consider both asset and affordability value. Use comps to do it.
Next, work backward from ARV. You will be deducting various costs from it, including fix-up costs, utilities while you hold the property, reselling costs and other expenses. Costs, profits and length of time on market will vary by location.
Cash on cash return is the measure of the actual return on your cash outlay. It requires knowing what gross rents are, then deducting all expenses, including debt service, to determine what property is netting per year.
Fix and flip or buy and hold? Use a bank or pay cash? Refinance when you’ve held property a short time? When do I sell property? Still a lot to learn… stick with the 24-Week Challenge.
Watch and learn:
Listen and enjoy:
- How to calculate Maximum Offer Price (MOP)
- Determine return on money you put in the deal… not ROI
- Why you need a reserve account on a property
- When you can begin claiming to earn cash flow
Mentioned in this episode:
- Reach Zack by phone: 707.247.4248
- Follow Zack on Facebook: REI Success Academy Facebook
- Zack’s Book: My First Deal Playbook
- Instruction on REI Success Academy Website: Web Class