Analyzing Deals 301: Multi-Family for Nomads

The following is the outline and additional resources of the class on Analyzing Deals 301: Multi-Family for Nomads.

This class shows you how the deal analysis process is different from what we teach in other classes on deal analysis when Nomads buy multi-family properties like duplexes, triplexes and fourplexes.

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Send the investment criteria you determined in a previous task to your Real Estate Broker so they can set up a search in the MLS to send you properties.

Mark this task complete once you have sent your criteria to your Real Estate Broker.

Analyzing DealsASAPFirst Meeting: Receive Property ListsProperty SearchUltimate Nomad ChecklistWeek 1

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Complete the "First Meeting: Analyze Deals" checklist:

https://learntoberich.com/analyze-deals/

Mark this task as complete when done.

Analyzing DealsASAPFirst MeetingFirst Meeting Analyze DealsUltimate Nomad ChecklistWeek 1

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Watch the recording of the live presentation of "Analyzing Deals 101: an Intro to Cash on Cash Return on Investment" available on:

https://learntoberich.com/cash-on-cash/

Mark this task as complete once you've watched it.

Analyzing DealsASAPCash FlowClassesFirst Meeting: Analyze DealNet Operating IncomeReturn On InvestmentUltimate Nomad ChecklistWeek 18Week 2

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Watch the recording of the live presentation of "Analyzing a Deal with Brian's Spreadsheet" available on:

https://learntoberich.com/how-to-analyze-a-deal-with-brians-spreadsheet/

Mark this task as complete once you've watched it.

Analyzing DealsASAPCash FlowClassesFirst Meeting: Analyze DealsGet Your First Deal DoneNomad BasicsUltimate Nomad ChecklistWeek 4Week 56

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Download a copy of Brian William's Deal Analysis Spreadsheet and save it to the Dropbox folder for this deal/purchase.

https://LearnToBeRich.com/spreadsheet/

Mark this task complete when done.

Analyzing DealsComputer SetupFirst Meeting: Analyze DealsUltimate Nomad ChecklistWeek 2

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Analyze properties daily as they come in from automatic property searches. Save a copy of Brian's Deal Analysis Spreadsheet for each deal you analyze in your Dropbox folder for this deal/purchase.

If the deal looks interesting after analyzing it, request a showing.

Mark this task complete once you've analyzed deals for the day.

Analyzing DealsCash FlowFirst Meeting: Analyze DealNet Operating IncomeUltimate Nomad ChecklistWeek 2Week 3Week 4Week 5Week 6Week 7Week 8

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Watch the recording of the live presentation of "Strategies to Get the Lowest Monthly Payment When Buying Real Estate" available on:

https://learntoberich.com/lowest-monthly-payment/

Mark this task as complete once you've watched it.

Analyzing DealsASAPCash FlowClassesFirst Meeting: Analyze DealsMaking OffersUltimate Nomad ChecklistWeek 58Week 6

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Decide which Insurance Agent you will use to insure your home purchase. You'll need this once you go under contract, but you'll want to do it earlier so you can get an estimate of insurance for analyzing deals.

You can ask your Real Estate Broker for recommendations.

Mark this task complete once you've decided on an Insurance Agent to use.

Analyzing DealsDream TeamDream Team - Pre-ClosingFirst Meeting: Analyze DealUltimate Nomad ChecklistWeek 2Week 61Week 9

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Call your Insurance Agent and get an Insurance Quote estimate to use when analyzing properties using Brian's Deal Analysis Spreadsheet.

You'll modify this slightly based on the price of the property you're analyzing.

You may want to discuss with your Insurance Agent additional coverage for Loss of Rent.

Your Insurance Quote typically varies based on your credit score and the deductible amount you choose.

Mark this task complete when you have an insurance estimate to use when analyzing deals using Brian's Spreadsheet.

Analyzing DealsASAPFirst Meeting: Analyze DealsNet Operating IncomeUltimate Nomad ChecklistWeek 2

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If you're going to allow your Tenant-Buyer to select any property from the MLS where you'd buy it and then offer it to them on a Lease Option, then setup your search page on JamesOrr.com.

Talk to James to have him show you this and get it set up for you.

Mark this task complete when it is setup or if you decide you're not doing this.

Analyzing DealsASAPFirst Meeting: Analyze DealsLease OptionMarketingOptionalTenant BuyersUltimate Nomad ChecklistWeek 2

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If you're going to allow your Tenant-Buyer to select any property from the MLS where you'd buy it and then offer it to them on a Lease Option, then after James sets up your search page on JamesOrr.com you will want to customize with your specific investing criteria.

Mark this task complete when you've customized your Lease Option Search Page on JamesOrr.com.

Analyzing DealsASAPFirst Meeting: Analyze DealsLease OptionMarketingOptionalTenant BuyersUltimate Nomad ChecklistWeek 2

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If you're going to allow your Tenant-Buyer to select any property from the MLS where you'd buy it and then offer it to them on a Lease-Option, then after James sets up your search page on JamesOrr.com you may want to purchase and setup a custom domain name for it.

The custom domain name will allow you to use that domain name on your marketing and have it URL frame the page James set up for you.

Ask James and he can usually get you a domain name and set it up for you for about $10 per year.

Mark this task complete when you've purchased a custom domain and had it set up for your Lease-Option Search Page on JamesOrr.com.

Analyzing DealsASAPFirst Meeting: Analyze DealsLease OptionMarketingOptionalTenant BuyersUltimate Nomad ChecklistWeek 2

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Decide which Lender you will use to finance your purchase.

You can ask your Real Estate Broker for recommendations.

Mark this task complete once you've decided on a Lender to use.

Analyzing DealsASAPDream TeamDream Team - Pre-ClosingFinancingPre-Showings: Qualify with LenderUltimate Nomad ChecklistWeek 2

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Analyze properties daily as they come in from automatic property searches. Save a copy of Brian's Deal Analysis Spreadsheet for each deal you analyze in your Dropbox folder for this deal/purchase.

If the deal looks interesting after analyzing it, request a showing.

Mark this task complete once you've analyzed deals for the day.

Analyzing DealsCash FlowNet Operating IncomeShowings: Request ShowingUltimate Nomad ChecklistWeek 2Week 3Week 4Week 5Week 6Week 7Week 8

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If the property looks interesting and you're considering it, create a property folder in your Dropbox folder.

Mark this task complete when done.

Analyzing DealsCash FlowNet Operating IncomeShowings: Request ShowingUltimate Nomad ChecklistWeek 2Week 3Week 4Week 5Week 6Week 7Week 8

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If the property looks interesting and you're considering it save a copy of the deal analysis spreadsheet for this property to the property folder in Dropbox.

Use the file naming convention:

"YYYY-MM-DD - 1234 Main St - Analysis Spreadsheet.xlsx"

Where YYYY is the four digit year, MM is the two digit month, DD is the two digit day of the month and 1234 Main St is the street address of the property.

Mark this task complete when done.

Analyzing DealsCash FlowNet Operating IncomeShowings: Request ShowingUltimate Nomad ChecklistWeek 2Week 3Week 4Week 5Week 6Week 7Week 8

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We are currently testing this as a service, but we've subscribed to a company where we can pull rental comparables for properties.

If you are analyzing a property and it looks interesting, you can email James and Tammy and ask them to pull rental comparables to see what fair market rent might be on the property.

Be sure to include the following in your email request:

  • Address of the property
  • Number of bedrooms (required to do rent comps)
  • Whether it is a SFH or apartment (the two choices for rent comps)
  • Whether you want just the report or the report and the CSV of the rent comps data if you plan to do some additional work on the data yourself in Excel

Mark this task complete when done.

Analyzing DealsCash FlowNet Operating IncomeShowings: Request ShowingUltimate Nomad ChecklistWeek 2Week 3Week 4Week 5Week 6Week 7Week 8

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If after analyzing the property it looks interesting, request a showing by emailing your Real Estate Broker.

TIP: If you're working with James and Tammy, be sure to email both of them since James may not be in his email and Tammy could setup up the showing before James will even be back in his email. If you just email James, he may not even see it until much later and then he'll typically forward it to Tammy to setup the showing.

Be sure to include:

  • Property address
  • MLS number if possible
  • Your availability to be able to see the property (provided the Seller can accommodate that day and time)
  • Any additional questions you might have about it (if any)

Mark this task complete when done.

Analyzing DealsCash FlowNet Operating IncomeShowings: Request ShowingUltimate Nomad ChecklistWeek 2Week 3Week 4Week 5Week 6Week 7Week 8

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Decide which Lender you will use to finance your purchase.

You can ask your Real Estate Broker for recommendations.

Mark this task complete once you've decided on a Lender to use.

Analyzing DealsASAPContract Deadline: Loan Application DeadlineDream TeamDream Team - Pre-ClosingFinancingUltimate Nomad ChecklistWeek 2

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In all but a small number of cases, we recommend fixed-rate 30 year mortgages for Nomads.

However, there are two situations we'd consider ARMs.

First, if you're buying the property and are 100% positive you're going to be putting a Tenant-Buyer in the property and you will be out of the property before the mortgage will adjust, then you can consider using an ARM.

Second, if you're buying the property with partners and the only loan you can get with the partnership is an ARM then you can also consider an ARM. However, in this case you probably should be putting a Tenant-Buyer in the property so it probably still falls under the first reason above.

Interest rates for ARMs (Adjustable Rate Mortgages) tend to be a little lower than the interest rates on fixed-rate 30 year mortgages. But the ARM interest rates can adjust over time causing much higher monthly payments and significant negative cash flow after the interest rate adjusts. This adds additional risk that you could have opted not to take on.

Mark this task as complete if you have decided to get fixed-rate mortgage or an ARM.

Analyzing DealsCash FlowContract Deadline: Loan Objection DeadlineFinancingNet Operating IncomeOptionalTenant BuyersUltimate Nomad ChecklistWeek 10

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Often for Nomads it is better to pay a one-time up front PMI (Private Mortgage Insurance) payment instead of monthly PMI on their loans.

This may mean coming to Closing with a little more cash.

Sometimes it means voluntarily raising your interest rate with your Lender to get a credit to pay for some or all of the up-front PMI.

Discuss these two scenarios with your Lender to see which one makes more sense to you.

Mark this task complete once you've discussed this with your Lender and decided which you'll pick.

Analyzing DealsCash FlowContract Deadline: Loan Objection DeadlineFinancingInterest RateNet Operating IncomeOptionalPrivate Mortgage InsuranceUltimate Nomad ChecklistWeek 10

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Talk to your Lender to see if buying down your interest rate makes sense in your specific situation.

Sometimes, especially if you have extra cash and you plan to hold the property for a long time, it makes sense to pay additional points to get a lower interest rate.

Mark this task complete once you've talked to your Lender about these options, analyzed them yourself and decided to buy down your interest rate or not.

Analyzing DealsCash FlowContract Deadline: Loan Objection DeadlineFinancingInterest RateNet Operating IncomeOptionalUltimate Nomad ChecklistWeek 10

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Sometimes if you have extra cash for down payment it might make sense to increase down payment.

We often consider this as an alternative to to paying up-front PMI or buying down the interest rate. If we're putting less than 20% down, one way to lower our monthly payment is to put more down to get rid of PMI instead of paying the PMI up-front.

Mark this task as complete when you've talked to your Lender about using a larger down payment and decided whether you will or not.

Analyzing DealsCash FlowContract Deadline: Loan Objection DeadlineDown PaymentFinancingInterest RateNet Operating IncomeOptionalUltimate Nomad ChecklistWeek 10

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Your Real Estate Broker can provide you with a list of recommended Insurance Agents. You're welcome to choose any Insurance Agent you want whether they are on the list or not.

Mark this complete when done.

Analyzing DealsContract Deadline: Property Insurance Objection DeadlineDream TeamDream Team - Pre-ClosingFirst Meeting: Analyze DealsUltimate Nomad ChecklistWeek 2Week 61Week 9

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If you have already done so, decide which Insurance Agent you will use to insure your home purchase. You'll need this once you go under contract, but you'll want to do it earlier so you can get an estimate of insurance for analyzing deals.

You can ask your Real Estate Broker for recommendations.

Mark this task complete once you've decided on an Insurance Agent to use.

Analyzing DealsContract Deadline: Property Insurance Objection DeadlineDream TeamDream Team - Pre-ClosingFirst Meeting: Analyze DealsUltimate Nomad ChecklistWeek 2Week 61Week 9

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Call your Lender and get an Interest Rate quote estimate to use when analyzing properties using Brian's Deal Analysis Spreadsheet.

You'll modify this as interest rates change or as your loan program changes for the property you're analyzing.

Mark this task complete when you have an interest rate estimate to use when analyzing deals using Brian's Spreadsheet.

Analyzing DealsASAPCash FlowFinancingNet Operating IncomeUltimate Nomad ChecklistWeek 2

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Determine what Rent you'll charge for the property or, if you're offering a Lease-Option, what Lease-Option Rent you'll charge for the property.

This is often done by researching what Fair Market Rent is.

Some Real Estate Brokers may subscribe to a service that allows them to pull rental comparables to help to determine rent.

Mark this task complete when you have determined your Rent.

Analyzing DealsASAPLeaseLease OptionNet Operating IncomePrepare to be a LandlordRentUltimate Nomad ChecklistWeek 55

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If you're offering the Tenant-Buyer a Lease-Option, determine what is your minimum acceptable Option Fee.

Mark this task complete when you have your minimum Option Fee for your Lease-Option or if you're not doing a Lease-Option at all.

Analyzing DealsASAPLease OptionPrepare to be a LandlordUltimate Nomad ChecklistWeek 55

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If you're offering the Tenant-Buyer a Lease-Option, determine what price the Tenant-Buyer can purchase the property from you in year 1 and year 2.

Mark this task complete when you have prices for year 1 and year 2 for your Lease-Option or if you're not doing a Lease-Option at all.

Analyzing DealsASAPLease OptionPrepare to be a LandlordUltimate Nomad ChecklistWeek 55

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Watch the recording of the live presentation of "Capital Expenses: The Silent Killer" available on:

https://learntoberich.com/cap-ex/

Mark this task as complete once you've watched it.

Analyzing DealsCapital ExpensesClassesUltimate Nomad ChecklistWeek 16

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Watch the recording of the live presentation of "Analyzing Deals 201: Selling with Lease Option" available on:

https://learntoberich.com/how-to-analyze-a-lease-option-deal-with-brians-spreadsheet/

Mark this task as complete once you've watched it.

Analyzing DealsASAPCash FlowClassesLease OptionNet Operating IncomeReturn On InvestmentTenant BuyersUltimate Nomad ChecklistWeek 19

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Watch the recording of the live presentation of "Analyzing Deals 301: Multi-Family for Nomads" available on:

https://learntoberich.com/analyzing-deals-301-multi-family-for-nomads/

Mark this task as complete once you've watched it.

Analyzing DealsClassesMulti-FamilyNet Operating IncomeUltimate Nomad ChecklistWeek 20

Improvements

The following are improvements I plan to make to this page based on some of my Standard Process Improvement Questions.

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