How to analyse a property deal
If you want to know how to analyse a property deal, you need to attend our advanced training for the full breakdown and blueprint. However, right now Samuel is going to give you three gems which are at the foundations of all his deals. If you are an experienced investor, these tips might be a nice reminder for you. However, for new starters in the property game, it's worth attending the free Crash Course so you can learn how to apply the knowledge in real life.
The way in which Samuel analyses his property deal is by calculating the best case scenario, worst case scenario and the most probably case. For each situation, you need to figure out the return on investment you would expect. In the worst case, this could even be a negative number as you might anticipate a loss. When coming up with this data, you need to use formulas, not feelings. Be honest and don't manipulate the figures to suit your desires. Be as realistic as possible.
It's important that you have an exit strategy in mind before signing any deal. If you are doing a HMO deal, imagine what would happen if the property didn't quite work as a HMO? How much money could you earn if it was a single-let? In another instance, picture yourself aiming for a BRRR deal where you want to buy a property and pull your money out after increasing its value. What would you do if the property actually gets down valued? What contingency do you have in place if the market collapses? We're always so excited to enter into a game but it's important to think about our exits too.
In the second part of this video, you'll see what happens when you attend the Crash Course!
