Are there any good formulas or charts posted for buying properties? As far as buying rentals and house flips I wanted to know if anyone uses a particular system when looking at deals. I think my main problem at this point is not knowing exactly what a good deal is. Please help! lol Thanks.
Take a look through the rehabbing and landlording forum, there are many such formulas and discussions about buying right.
I don’t do flips, I am a buy and hold investor.
As a buy and hold guy, I don’t buy a property, I am buying the CASH FLOW – both the monthly cash flow from rent and a lump sum from profit when the property is sold.
For each potential purchase, I do a cash flow analysis. A good enough deal for me is when the Net Operating Income is at least 25% greater than my debt service. If you want that reduced to a formula then
NOI / (Debt Service) * 100% >= 125%
That sounds really good Dave. I dont think I would be able to get into flipping for a few years. I know I can build a nice portfolio from rentals the way my brothers and father have. So when you are doing your analysis you may look at a property like total expenses $1000, net cash flow profits after expenses $250? Do you ever go lower?