How to Analyze a Real Estate Deal

Retired-ish

Investing in real estate historically has been a tried-and-true method of building wealth over the long-run, if you have the right wherewithal and mentality to do it – Let’s face it, it takes work.

However, as with any type of investment, investing in real estate has its own set of risks.

Without proper analysis, you can lose a lot of money even if you accept what looked like a great deal. Or, you might be generating minimal cash flow that could have been a lot more cash flow if you were better prepared when analyzing your real estate deals.

In this episode, we show you how to analyze a real estate deal and compare it with other investment opportunities.

More specifically, I discuss:

• Real estate is a numbers game
• Some of the risks involved with real estate investing
• The “4 Return Components of Rental Real Estate”
• The potential tax benefits of investing in real estate
• Analyzing a real estate deal
• Using your analysis to help you make decisions

Resources:

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Key moments are:

00:00 Real estate investing has inherent uncontrollable risks

04:07 Critical components of real estate investment analysis

07:25 Hypothetical 20% return on property investment

11:26 Consult a tax advisor for potential write-offs

14:17 Avoid negative cash flow with proper monitoring

18:27 Using analysis for hypothetical $650,000 inherited property

21:36 Low rate of return, mortgage doesn't matter

23:14 Conservative 4% annual appreciation yields $26,000

27:26 LPL Financial offers advisory services, consult professional

28:57 Municipal bonds tax free, consult advisor, no guarantees