Buy Perfect Rentals Every Time...
youtu.be
The video discusses how to properly analyze and purchase a rental property. The speaker emphasizes the importance of understanding the max allowable offer formula, which is ARV times 75 minus repairs, to ensure that you never have to come out of pocket while owning the property. To calculate ARV, use the 333 rule, which involves finding three houses that have sold within a third of the subject property's square footage, within a third of its age, and within a third of its bedroom count. It's important to find three comparable house sales that have sold within a third of a mile of the property you're interested in, within the past three months.
To determine if a rental property will cash flow, use the cash flow formula, which involves taking the monthly rent and subtracting all monthly expenses, including mortgage payments, property taxes, insurance, and maintenance costs. The result should be a positive number, which means the property will cash flow. It's important to be conservative with your estimates and factor in unexpected expenses. To ensure equity, buy the property at a discount using the max allowable offer formula, which involves calculating the ARV and subtracting repair costs.
To calculate monthly cash flow for a rental property, subtract all monthly expenses, including mortgage payments, property taxes, insurance, maintenance costs, property management fees, and vacancy rates, from the monthly rent. The speaker recommends looking for 200 to 400 dollars in positive cash flow per month. If the property meets the equity formula and the cash flow formula, it's likely a good investment. The speaker offers free resources on their Instagram, YouTube, and TikTok under the name @samefasterfreedom, as well as a mentorship program for more in-depth training.
The video discusses how to properly analyze and purchase a rental property. The speaker emphasizes t