Know which assumption breaks the deal
A lower rent. A bigger repair bill. Another month of holding costs. Learn how to analyze a real estate deal so you can explain your yes, your no and what would change either answer.
Explore the matching classHow to analyze a real estate deal
Put the evidence beside the numbers. Start with the purchase price, property condition, comparable sales or rents, and your intended use. Mark each input as verified or estimated.
For rental property analysis, include vacancy, operating expenses and reserves. Use the deal-analysis guide for your starting point and the learning hub for related topics. Now you have a clear list of what you know and what to check next.
Read the guides on the blogCheck the loan beyond the monthly payment
Put the rate, points, fees, amortization, balloon date and cash to close together. Then test the question that changes the plan: what happens if you cannot refinance?
Use the DSCR loan guide on the blog to separate qualification from deal analysis. Use the seller-financing guide to examine the seller's terms. Recalculate when the structure changes. Loan approval answers a different question than whether the property meets your criteria.
Count the bills through sale or move-in
Repairs finish. Bills keep coming.
Separate repair costs from carrying costs. Give repairs a scope, estimates and room for unknowns. Give carrying costs a timeline covering interest, taxes, insurance, utilities and other ongoing bills. Include closing and selling costs where they apply.
Run that timeline through the sale or tenant move-in, not just the last day of repairs.
Find the number that changes your decision
Lower the rent or sale price. Raise the repair costs. Extend the holding period.
Change one input at a time, then test several moving against you together. Record where the deal stops meeting your criteria.
For a quick first look at value, repair estimates and a maximum allowable offer, use the free FIRE AI: Starter Analyzer kit. Check the inputs, then examine what changes the answer.
Get the free analyzer kitPut your yes, no or not yet on paper
Keep your assumptions, sources, financing terms, cost estimates and sensitivity results in one decision record.
Write down what needs verification and what would make you renegotiate or walk away. When a quote changes, revisit that input and your decision instead of rebuilding the whole argument in your head.
A prettier spreadsheet is not the goal. A decision you can explain is.
Practice the math instead of staring at it
In Calculate Better Deals, I teach finance basics, amortized and interest-only notes, balances and amortization schedules, yields and discounting, and real-world applications.
Open the Calculator Basics Manual, have your HP10BII calculator or the 10bii app ready, and work through the practice drills. You have calculations to work, not just concepts to read.
Explore the class for the lessons and materials.
Explore the matching classInstructor: Rich Rice. Work the payment, yield, note, and refinance math before you commit.
Drop in an address for a quick first look: recent nearby sales, an after repair value (ARV) range, repair estimates and a maximum allowable offer.
Articles on finding, funding, analyzing and fixing deals, written for investors who want to check the numbers before they commit.
Eight topics, each paired with a class and a tool. Pick the next question you need answered.
Gather the purchase price, condition, comparable sales or rents, proposed financing and estimated expenses. Mark unverified inputs as estimates so your next checks are clear.
No. Vacancy, operating expenses, maintenance and reserves belong in the calculation alongside debt payments.
Change rent, repair costs or holding time and compare the revised calculation with your criteria. Test changes individually, then combine them to see their effect together.
Rich Rice teaches financial calculator basics, amortized and interest-only notes, balances, amortization schedules, yields and discounting, and real-world applications. The manual and practice exercises give you calculations to work through yourself.
The materials use an HP10BII calculator or the 10bii app. Have one ready for the practice exercises.
Make the decision. Explain the math.
Work through Calculate Better Deals to practice the financing calculations behind your next property decision.
Explore the matching classYour first Wednesday is free
Visit the FIRE Center in Riverside or join Deal Room and FOCUS on Zoom.