8 Steps to Real Estate Investing Success | Revestor Blog

We thought that this was such a great question that we decided to share it with the group?

Here is exactly what one of our Users asked us today?

QUESTION:

?I am interested in purchasing a specific property. ?Does this program have the ability to calculate the offer amount I should make on the home I want to purchase in order to get cash flow? Of course, given the rent??Example: The home is listed for $90,000?.It can be rented for $1200.00 monthly: ?What should my offer be in order to have cash flow? ?Should I offer $70,000. or $60,000??

ANSWER:

First things first, if Revestor does not have the specific Property you are looking for just search the site for a similar property. As long as the Purchase Price is about the same you can use Revestor?s Calculator on any Property. (Note: in order to get listings onto Revestor Agents and Brokers must SignUp for a Free Listhub account and select us as a channel to syndicate to)

We found a similar Property on the site and here is exactly what we did:

1. Adjusted the Rent to $1,200 with the slider (Note: always doublecheck and research the Estimated Rent because it is the most important number)
2. Adjusted the Purchase Price down to the Asking Price of the other Property or to the Offer amount that you want to make)
3. Adjust/Doublecheck the Expenses by clicking the Edit button/dropdown (Note: that an 8% Property Management Fee is in there by default, remove if you do not use a Property Manager. Usually the HOA fee is populated if the Agent entered it into the listing, however please doublecheck this if the home is a CONDO or PUD. If there are additional Expenses you are aware of you can add them to any of the fields, i.e.?Utilities,?Maintenance,?Repairs, Vacancy Rate, etc.)

All these changes will dynamically change all the Key Real Estate Investment Indicators on the Property and should produce a Cap Rate of 10% (which is outstanding)

4. Adjust?the DownPayment?to what You or the Buyer is putting down. IF the down ? payment isn?t enough to create positive Cash Flow?then try putting more CASH down or less CASH down for more leverage (just make sure your debt-service-ratio?is above 1.4~) On this deal as long as there is not repairs or rehab to be done the investor could be looking at a potential Cash Flow?of $634/mo?and a Cash-On-Cash Return?of a whopping 33%

AND Finally, choose the Exit Strategy

5. Buy&Hold or Rehab&Resell. IF?its Buy&Hold click the Edit button

6. Adjust?how long the investor will Hold onto the Property (i.e. 5yrs, 12yrs, etc.)

7. Adjust?what you believe the Annual Appreciation will be (i.e. 1%)

8. Adjust?the Closing Costs for when you sell the Property (i.e. 6% real estate commissions, 2% title, escrow, closing cost fees = 8%)

Now you?ve set yourself up for success with a massive potential ROI and Net Income (excluding Capital Gains and Inflation)

Create a FREE Revestor Account today to get all of these tools for your real estate investing business.

Source: http://blog.revestor.com/2013/01/26/8-steps-to-real-estate-investing-success/

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