In this episode, Ryan and David discuss the critical importance of analyzing deals correctly in real estate investing. They delve into the concept of ARV and the significance of developing a rehab estimate to accurately analyze a property. They also explain how to calculate an offer using ARV and introduce the 70 percent rule.
Ryan and David dive into the downsides of misanalyzing a deal and the repercussions that come with it. They emphasize the time and skill required to estimate rehab costs accurately, as this is crucial in analyzing a property.
Moreover, they provide a formula to help investors analyze a deal: ARV - 30% - repair costs - assignment fee = offer price. They also discuss their approach to rehab costs, which may be slightly higher than other investors, as they prefer a higher rental grade. David stresses that investors should always feel uncomfortable with how low their offer is. In fact, you should treat your initial offer just as an icebreaker.
This episode is packed with insights that will help investors analyze deals correctly and avoid costly mistakes. Tune in now!
David's Social: @dlecko
https://www.dealmachine.com/pod
Ryan's Social: @heritage_home_investments