How to Quickly Analyze an Investment Property

http://www.biggerpockets.com/renewsblog Investment properties are everywhere. Hundreds, thousands, maybe tens of thousands (depending on where you live.) So, obviously, it’s impossible to go an look at every single one. So how do you choose which ones to look at, what to spend your time analyzing, and how the heck do you even analyze it?

I’ve had a few questions lately about how I analyze an investment property – so today I decided to make a quick video showing exactly how I do it. This is not a comprehensive analysis, but just a quick, 5 minute look at what kind of income the property will provide, based on the income, the expenses, and the 50% rule. This property is an actual property, currently listed for sale in my town – so this is about as real as it gets! Check it out, and let me know your thoughts below in the comments. What would you offer on this property?

20 thoughts on “How to Quickly Analyze an Investment Property”

  1. How would this change if you are going to occupy one unit. I did the same math here and the property I'm looking at has 64% ROI

  2. could we further speak regarding this 16 unit property building is 2 yrs old and seller is builder not a holder. where can i send you the data??

  3. Brandon did you pass jr high math? This was so bad that you need to stop making videos. The fact that you dont inlude property tax and insurance is beyond stupid.

  4. what do you recommend for people who live in more expensive areas? the cheapest property near me is over 500k and 20% down adds up to a lot. do you recommend the same strategy?

  5. If you calculate a bid price that is much lower than the asking price, then why not submit the offer anyway? The worst they can say is no. Don't let an apparently overpriced property deter you from submitting a bid that fits your yield requirements.

    The "asking price" may not be the actual "wanting price." You will only know by submitting a bid.

  6. No property taxes? No insurance? Only 20% down on a residential investment? Folks, do what you want….it's your money. But if you follow this advice, you're setting yourself up for big losses (Read: bankruptcy) when the market goes south again. Just ask those that lost MILLIONS only 7 years ago by investing like this…. This way of investing looked good when everybody was leveraging to the hilt, but I thought everyone had learned their lesson by now….guess not 🙁

  7. I have a question. He does say that half of the income goes to expenses, and what is left goes to the mortgage and cashflow… but that would imply that he would divide BEFORE he subtracted the mortgage, not after. This does make a difference, and was wondering if this was just a mistake. 

  8. Hey Brandon great video big fan of you and BP. Do you have a spreadsheet on how to do this quick analysis? I would really appreciate it. Thanks. 

  9. very useful info! You all at biggerpockets are so helpful 🙂 In my area which I rent to, it's considered a high crime, low income area, one tiny bedroom STARTS at $600… Good old New York, NOT…lol

  10. Great information however  in order  to be accurate one must always calculate in all expenses and leaving out taxes & insurance in the calculation makes that $335 not realistic.

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