063: The Six Pillars to Profits: Pillar 3 - Secret to Analyzing Phat Deals

Today, I’m going to share some stories about what I did wrong to prevent you from making the same mistakes. Pillar 3 - Secret to Analyzing Phat Deals is often the point where most new investors fail.

They make bad assumptions and become too aggressive. They over promise themselves and their investors. That’s a recipe for failure, not success. It can get you into a lot of trouble. I know because I have failed time and time again, but I try to not make the same mistakes.

Topics on Today’s Episode:

Pitfalls of broker packets with an offer memorandum (OM); peel back layers to find accurate information to analyze a deal and make assumptions Select software (Kahuna Cashflow Calculator) to underwrite and analyze deals Most people speed and drive numbers too fast; they overestimate what they can do - be conservative and learn to say, “No” Data and due diligence identify if it’s a deal or not, don’t buy based on emotions; utilize Do Not Exceed bids Rules of Thumb to Underwrite Properties on Per-door Basis: Raised salaries by $1,285; invest in your people Increased online advertising and promotion by $200 Budgeted $800-900 for upkeep and maintenance Office admin bumped up $150 Get an insurance agent to give you a quote Verify utilities by obtaining costs for the past three months Underwrite cost of taxes going up due to new purchase price CapEx: Determine reserves and make adjustments Underwrite with 25% down; amortize at 25 years, not 30 Never underwrite property with higher than 94% occupancy Always underwrite concessions at 3% Ultimate Underwiring Goal: Under promise, over deliver

 

Links and Resources Mentioned:

Kahuna CashflowCalculator Robert Kiyosaki (Author of Rich Dad Poor Dad)

Quotes:

“They over promise to the people that matter most - that’s your investor, that’s the money. When you do that, it’s a recipe for failure.” Corey Peterson

“Your experience is the sum of two things: All your successes and, I think more importantly, all your failures.” Corey Peterson

“If you look at underwriting and analyzing deals from the right perspective, it will give you a key to be super successful.” Corey Peterson

“When we really, really want something, we try to make it work.” Corey Peterson

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