What makes a bad deal good?

Having a property pay for itself is not in anyway an easy task, if it was everyone would be doing it right? It takes time to locate, negotiate and occupy "self-carrying" properties, but it is possible. HOWEVER, and this is a very important "however" you need to move NOW when it is found. These properties are very rarely just waiting to be found. They are often homes that have been on the market for a long time and have just had a recent price drop..... then BAM!! a BAD DEAL IS NOW GOOD

Now keep in mind that this isn't hidden information, its going to be public knowledge..... so when you find it...... you need to buy it! If the numbers work its not time to hem and haw its time to buy!

The reason I say this is that you can not afford to lose the property to another investor, you need to act and act now. I'll get into that more later in a different post.

Now back to what makes a bad deal good. First of all we want the property to pay for itself, or at the very minimum cost you a few tanks of gas a month. To make this a reality many factors have to work together. You need to equate four key points:

1. Average Rental Rate
2. HOA Dues
3. Yearly taxes on property
4. Your monthly mortgage payments on an 80% loan - EVEN IF YOU ARE PAYING CASH!!

Most of this information is easily obtainable but if you need help locating it contact your local Realtor....I know of a great one ;)

When you equate all pertinent information 1 should be greater then 2+3+4, is it?

YES? - BUY IT NOW
NO? - Renegotiate or move on

This simple equation helps tremendously when deciphering what makes a bad deal good.

For more information contact Rick

Rick Rapp
Real Estate Investment Specialist
rick@rickrapp.com