How to Analyze Fix And Flip Deals
In this blog I'm going to show you how to analyze fix and flip deals. The screenshot below displays how a fix and flip deal was broken down and analyzed. Without knowing what cost to account for, an inexperienced investor may look at the deal from surface level and anticipate a hefty $120,000 payday.
However, upon deducting all costs associated with this fix and flip deal, it is discovered that the net profit would be approximately $47,750. Yup, it's not the anticipated $120,000... but really, who would complain. Do 3 to 5 of these fix and flip deals per year (which is very doable), and I'm sure you'd be extremely satisfied with your annual revenue.
No two fix and flip deals are alike, that's why it's super important you know your numbers and you know how to analyze fix and flip deals.
“You make money when you buy real estate, not when you sell.”
"Reality" fix and flip T.V. shows typically spotlight gross profits, they often fail to depict the breakdown of actual costs, which in result determines the net profit (what you actually get to keep).
I get it, huge paydays are SEXY... which by default creates I'm sharing this knowledge because I've known way too many new fix and flip investors lose big on their first deal, causing them to immediately give up on their dreams of breaking into the business and creating a life by their design.
Know your numbers, learn how to analyze fix and flip deals correctly and... remember, you make money when you buy, not when you sell. Last but not least you unless you have leads you won't have any deals. Check out how seven ways I can get you leads online for your real estate investing business.