What is the profile of a typical real estate investor? Starting investors are usually currently working a steady job, but not happy with their income or prospects for further growth. They try a house or two as a sideline investment. After buying and selling a few properties, your success may very well lead you into real estate investing full time. Once you are in the business as your full-time profession, there are a lot of opportunities that will present themselves. You may generally continue to buy, fix, and sell homes retail. But you may also buy a few properties inexpensively enough to “flip” them wholesale, that is, for a smaller profit, but no work and a quick closing. Along the way, you will likely delve into rental property, and eventually even larger projects. At EquityMax, we have the expertise to introduce you to, and guide you in, all of these areas.
Here is a convenient worksheet to use when analyzing a potential purchase. You’ll be able to determine very quickly if a deal makes sense. Feel free to print out this worksheet for your everyday analysis.
PROPERTY PROFIT CALCULATOR
1. Selling price, after repaired ___________
2. Down payment ___________
3. Closing costs upon acquisition ___________
4. Miscellaneous expenses ___________
5. Total costs related to acquisition (Items 2-4): ___________
6. Holding and operating expenses:
A. Repairs (always figure 20% more than your
hands-on estimate) ___________
B. Mortgage payments for ______ months. ___________
C. Property taxes during holding period ___________
D. Insurance ___________
E. Utilities ___________
F. Advertising ___________
7.Total holding and operating expenses ___________
(Items 6A-6F)
8. Selling expenses and closing costs upon sale
A. Real estate commission (maybe) ___________
B. Closing costs ___________
9. Total selling and closing costs ___________
(Items 8A-8B)
10. Mortgage payoff(s) ___________
11. Total costs & expenses (lines 5, 7, 9 & 10) ___________
12. Anticipated net profit (line 1 - line 11) ___________
Note: To determine out-of-pocket cash during transaction, add total of lines
5+7-6C.
But you may also buy a few properties inexpensively enough to "flip" them wholesale, that is, for a smaller profit, but no work and a quick closing. EquityMax can help you in this regard, by marketing your wholesale property on our list at no obligation to you!