Property Analysis is Everything

Property Analysis is Everything

by Steve Davis, Founder of Total Wealth Academy


When it comes to property analysis, every step counts. Whether you're acquiring a property from a seasoned real estate agent, a foreclosure, or an off-market deal, the source doesn't matter—what does matter is your ability to thoroughly analyze it. Start by focusing on the After Repair Value (ARV), which you derive from comparable sales in the neighborhood. These comparables should match your target property in terms of size, number of bedrooms and bathrooms, and overall condition.

If you're experienced, you might be able to estimate rehab costs on your own. However, when you're starting out, it's wise to involve a general contractor. Ideally, they should walk the property with you to assess everything that needs fixing. If they can't make it, use your smartphone to capture comprehensive photos and videos to guide their remote assessment.

When flipping a property, time is money—literally. Each month you hold onto the property, especially with a hard money loan, you're incurring costs. So, it's crucial to understand the local market and how quickly properties are selling. For example, if homes in your target area are sitting on the market for longer than expected, it could be a sign of overpricing or other market dynamics.

When dealing with rental properties, especially in markets like Houston, it’s important to price them competitively. Higher-priced rentals can take longer to lease, and there’s a smaller pool of tenants willing to pay top dollar. This isn't Manhattan, where rents soar; in Houston, most competitive rentals fall below the $2,000 mark.

For accurate property evaluations, rely on recent sales data. In Texas, this can be tricky due to delayed information releases, so work closely with a real estate agent who can provide the most current insights. When calculating property value, ensure you’re using comparable properties within the same neighborhood to avoid skewed results.

Also, consider protesting your property taxes annually, as appraised values don’t always align with market prices. Services like O’Connor Associates in Houston can help with this, potentially saving you significant amounts.

In every deal, whether you’re fixing and flipping or renting, thorough due diligence is your best tool. Plug your numbers into analysis software, practice with hypothetical properties, and understand the details before reaching out for assistance. This preparation ensures that when you do need expert advice, the process will be smooth and effective, setting you up for success in your real estate ventures.

This is where Total Wealth Academy comes into play. At Total Wealth Academy, we guide you through the entire process of property analysis, from understanding the ARV to estimating rehab costs, and navigating the complexities of the market. We don't just provide you with information; we empower you with the tools, strategies, and confidence to make informed decisions on your own.

Our goal is to equip you with the knowledge and skills to analyze properties like a pro, whether you’re flipping a home or managing rental properties. We offer hands-on training, real-world examples, and access to expert guidance so that you can confidently navigate the real estate landscape.

By working with Total Wealth Academy, you’re not just learning how to invest in real estate—you’re learning how to build long-term wealth. We’re here to support you every step of the way, ensuring that your due diligence is thorough and your decisions are sound. When you partner with us, you’re setting yourself up for success, with the peace of mind that comes from knowing you have a team of experienced professionals backing you up.

Ready to take the first step? Come into our free sample class and get started today!

Sign up here www.totalwealthacademy.com/class

To view or add a comment, sign in

More articles by Steve Davis

Insights from the community

Others also viewed

Explore topics