Blog Archives - REIkit.com

The Math Behind the Real Estate ARV Calculator Explained

The one thing that is constant is that I am consistently improving the software in response to customer feedback, as well as a result of my own daily use of the tools. As a result of feedback from one of customers who is a HomeVestors franchisee and performs a high volume of ARV assessments, there are several new calculations that have been added to the ARV calculator. These calculations should help you reason much more effectively about the potential value of your real estate even more in line with appraisal best practices, especially when performing a sales comparison analysis and adjusting your comps in the tool. There are now 4… Read More

18 Essential Metrics to a Complete Real Estate Investment Analysis

When it comes to analyzing the potential of an income producing property, most people focus on Cash on Cash return as the only measure of their real estate return on investment. However, to get a complete picture of the return of your real estate investments, there is an array of metrics that you should include as part of your rental property analysis. While initially overwhelming, in this post I’ll break down each metric, provide the formula to calculate it, and show you examples, using a real-life advertised deal. In addition, I’ll also go into how these figures and ratios relate to each other. The total picture you get from preparing… Read More

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7 House Flipping Mistakes To Avoid When First Starting Out

There are several mistakes that I consistently see new (and even experienced) real estate investors make when first venturing into house flipping. These mistakes are understandable when the excitement to get started conflicts with the knowledge required to execute a house flipping project quickly, cheaply, and profitably. In this article I list the seven major house flipping mistakes that new real estate investors are likely to make when first starting, and how to avoid them in the first place. Mistake #1: Buying Too High When a new investor wants to start flipping, they turn to the first place they know to find properties: the market. These are properties listed… Read More

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How to Evaluate the Best House Flipping Software

If you are looking online for the best house flipping software or the best real estate investment app, you may be wondering how to choose from the many software providers that are available. Many real estate investment apps claim to offer similar features, but looking more closely under the hood, some offer superior real estate analysis and property due diligence tools, and others only offer the bare minimum, or worse yet, completely misrepresent their offerings. To evaluate whether the real estate investment software that you are looking at generates the most accurate real estate investment analysis, you have to first understand a number of characteristics of what makes up the… Read More

How to Import MLS Comps from Redfin into REIkit.com Real Estate Investment Software

REIkit.com real estate investment software has powerful tools built in for performing thorough due diligence on real estate investment properties. This due diligence normally starts with the process of calculating after repair value (ARV) by first selecting appropriate comps, and then using the method that most appraisers use to value property: that of a sales comparison analysis. This post is only about the first part of the equation, and specifically on selecting the sources comps. Whereas the free version of the after repair value calculator suggests 5 comps from Zillow, and allows you to add additional properties to the analysis one by one, the premium version of the software, not… Read More

Why Are Your Real Estate Investment Offers Always Getting Rejected?

Despite carefully following the most commonly used rules of thumb in real estate investment, new investors eager to get their first deal under contract, nearly always find their offers immediately rejected. They frequently experience the following scenario play out: I follow all of the rules of thumb, make sure I’m conservative with my numbers, and end up with an offer that’s way below listing price….and this is the 10th one that has been rejected. or My MAO says that using the 70% rule, I should offer X which is less than half the listing price, and my realtor won’t even submit the offer. So what do these frustrated investors end… Read More

Real Estate Investment Strategies: Example BRRRR Analysis

In this video and post we are going to analyze a property that was recently advertised on BiggerPockets as a potential BRRRR real estate investment strategy candidate. In order to perform the analysis, we will be going over: An Overview: What is BRRRR? The Potential Deal What is the 2% Rule? Gathering the Due Diligence Data Verify the After Repair Value (ARV) Identify the Rehab Costs Enter the Purchase, Sale, and Holding Costs Purchase Costs Sale Costs Operational Expenses (OpEx) Modeling BRRRR Financing: Buy, Rehab, Refinance Hard Money Purchase Loan for Purchase & Rehab FHA Conventional Refinance Rental Property Income Capital Expenditures (Reserves) Itemizing CapEx How Does CapEx Affect… Read More

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Why Should Cash-on-Cash Analysis Only Be Used For the First Year of Rental Cash Flows?

The other day I was thinking about how we use Cash on Cash Return (CCR) to filter and compare potential rental property investments, and how that metric is only useful to understand the first year performance of a potential long-term buy-and-hold deal. This post explains the limitation of Cash on Cash Return (CCR) beyond the first year, and why you should use Internal Rate of Return (IRR) to analyze the long-term potential of your rental property investments instead. Starting at the Beginning: What is ROI? ROI is the rate of return of your total investment. Generally, ROI is used for short-term investments such as flips where you… Read More

How Can I Get Contractors to Give Me a Rehab Estimate for a Potential Flip?

This question is often code for: I don’t know how to estimate rehab costs, so how can I get a contractor to help me perform my due diligence on a property by coming up with a Statement of Work (SOW) and estimating it so that I can put in an offer? The Set Up You have decided to jump into flipping because that’s how you build up your war chest to start using the BiggerPockets BRRRR strategy. You have no construction estimation experience, but you have just found your first distressed property on the MLS, through a property wholesaler, or just driving for dollars, and are dying to get… Read More

Real-Estate Investment Financing Strategies

6 Strategies for Financing, Refinancing, and Exiting Real Estate Investments

While I’ve been improving the financing section of the REIkit House Flipping Software, I’ve had some time to think about the pros and cons of a few of the different investment strategies that can be used to finance your real-estate fix and flip or buy and hold projects, and eventually get your money back to reinvest in your flipping business, or rental property investments as in the case of the BRRRR strategy. Coincidentally, I’ve recently also had the chance to get into a few debates on the subject. There must be something in the air this week… The following is the list of the most common financing strategies that I’ve been thinking about recently: Strategy… Read More