Investment Property Analysis Done Right

Investment Property Analysis:

Crunching the Numbers for Cash Flow

 

property investment analysis

When buying a house, potential buyers create a wish list of items they want. Then they decide if they are willing to pay the asking price in order to acquire the property. For many, the final decision is based on whether or not they can afford the mortgage payments. When investors buy a multi-family rental property they are also doing very similar number crunching, albeit at a much deeper level. Investment property analysis is a pivotal exercise.

A big part of being a real estate investor is analyzing deals. We perform an investment property analysis to see if the asset is worth acquiring. We look to see if we can service the debt. We also determine how much cash flow remains after all the expenses are paid. This is the net operating income (NOI). If this NOI is acceptable and will allow for a healthy positive cash flow, then it’s a property worth investigating further. We partner with private lenders to acquire these properties so we need to ensure the property can produce the returns we desire.

When you analyze as many properties as we do, you need a system. Simple Acquisitions uses several formula driven spreadsheets and a multi-step process to help determine if a property is a viable acquisition.

In the video below Marc will walk you through the initial number crunching exercise. You will see all the numbers that are considered during this primary review, and more importantly, how to interpret them.  This preliminary analysis is just the 10,000 foot view. If a property meets the initial financial requirements, we dive deeper into more in depth number crunching.

 

 

 

If you want to know more about investment property analysis then sign up for our Property Analysis video series below. This video is the first one in the series. There is some great information that will help you understand how deep we go in to the financials of a property before making a buying decision.

Property Evaluation Campaign

Find out what numbers are crunched for investment properties
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Remember, real estate doesn’t have to be complicated. With Simple Acquisitions it’s smart, secured and simple!

 

 

Marc Dupuis

About Marc Dupuis

Marc got the real estate bug in his early twenties, and it’s never left. He has multi-faceted experience dealing with real estate investment companies. Marc’s is what you can call a real estate jack of all trades. He’s been an investor, landlord, property manager and builder in the Ottawa area since 1996 when he bought his first income property. He has since acquired a dozen income generating properties. He’s brokered property purchases for friends. He’s a partner in a commercial building and has built several new homes. His most recent build was featured in the May 2012 edition of Ottawa Magazine http://www.ottawamagazine.com/homes-gardens/2012/05/11/a-house-we-love-a-cliff-side-dwelling-in-chinatown-and-on-lebreton-flats/ Marc manages the research and acquisition activities for Simple Acquisitions, LP. He creates strategic alliances with financial institutions, property managers, brokers, attorneys, contractors, developers, and real estate investment companies on a daily basis. Marc is also the liaison between the company and its private lenders. Marc has an innate ability to see the end result when nobody else can. He’s known for bringing all the necessary resources together to achieve his goals. He loves to talk to aspiring investors and provide education and guidance where he can. He even sent a laptop to an unemployed man that he met at a gas Station in North Carolina who was down on his luck, in the hopes that it would be a tool that could help him learn about way to make a living.
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