what is the best way to become a transaction analyst. i want to learn how to read the numbers to anylze the property to know if its a deal. can anyone help
Read these forums every day and you’ll have the answer. It’s just not that complicated!
Mike
I would say read the numbers and then go out and walk through some houses. Find a realtor. They can help you with values and also get you in to these houses so you can see first hand. Keep doing this and eventually you will learn the values and areas.
Good luck!
Oh, and yeah, keep reading this forum.
It depends on the property. Commercial properties are often compared against one another with income capitalization or annual return on investment.
Smaller, residential stuff (and sometimes commercial) can be quickly sized up as retail or wholesale by calculating value in dollars per square foot.
For example, if single family homes in your area have a median value of $100 per square foot, and you find an average home in good repair which has 1500 square feet, then $150,000 is the retail price, and wholesale would be about 70% (or less) of that. So, if the seller will not, under any circumstances, entertain the price of $105,000, you don’t have a prospect for a wholesale deal.
Otherwise, you could just have a real estate agent pull comps.
residential Single Family Homes values are mostly comprised of their location and features.
Location is the most important aspect of SFH value’s.
to get a good idea of values go out and look at house’s with realtors. Learn your market.
Rental properties should be looked at their income they bring in for their values.
thinkbillions - My take is that it depends on what you want to do with the property. For example, if you want to flip properties you will probably need to know how much you can sell the house for after it is fixed and then subtract your profit, your costs (to fix and carry the property during the fixing up/selling process), some margin for error = $ to pay for the house.
In the other hand if you plan to rent it, the price that you can get for the house after it is fixed is not as important as how much rent you will be able to get for it. You need to buy it at a price that will allow you to pay the mortgage (principal + interest), operating expenses and leave you with some positive cash flow.
In short I guess you need to define what you want to do first, and then you can check if it is a deal or not.
And now I am going out of my confort zone here… If you are expecting to find deals, I don’t think you will be very successful. It seems that you need to create deals, if you know what I mean. Once you find a motivated seller, it doesn’t matter how much he is asking. you need to calculate how much you can pay to make the profit you want and than offer that. I believe that in the majority of the cases, your maximum price will be much lower than the asking price… Just my 2 cents.
good luck!