How important is cash flow when analyzing real estate deals? Many rookies zero in on this familiar figure when crunching the numbers, but there’s another metric that is FAR more important: cash-on-cash return. This simple but powerful equation can help you determine whether an investment property is worth buying!
Welcome to another Rookie Reply! Many rookies struggle to analyze deals when starting out. Fortunately, Ashley and Tony are here to show you exactly how to calculate your cash-on-cash return on a property. They discuss when to use lines of credit to help fund deals, as well as how to pitch seller financing options that make sense for both sides. They also talk about the home appraisal process and, finally, whether an offer on a property can ever be TOO low!
If you want Ashley and Tony to answer a real estate question, you can submit a question here, post in the Real Estate Rookie Facebook Group, or call us at the Rookie Request Line (1-888-5-ROOKIE).
In This Episode We Cover
Why you should use cash-on-cash return over cash flow when analyzing deals
How low is TOO low when making an offer on a property
When it makes sense to use a line of credit for a down payment
The purpose of appraisals and when you might need to order one
How to effectively pitch seller financing options so both sides walk away with a win
And So Much More!
Links from the Show
Find an Agent
Find a Lender
Ashley's BiggerPockets Profile
Ashley's Instagram
Tony's BiggerPockets Profile
Tony's Instagram
Real Estate Rookie Facebook Group
Join BiggerPockets for FREE
Submit Your Real Estate Rookie Question!
Use the BiggerPockets Investment Calculators to Analyze Your Deals
Using Lines of Credit to Kickstart Your Investing Career
Check the full show notes here: https://www.biggerpockets.com/blog/rookie-308
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107: 10 Income Streams on 1 Property by “Land Hacking” w/ Kai Andrew
106: Asset Protection for Rookies: 7 Wealth-Saving Answers from an Expert
105: Don't Lose Your Portfolio to Lawsuits! Here's How to Protect Yourself
104: Rookie Reply: Do I Need a Lawyer to Evict Tenants?
103: From Restaurant Waiter to 100+ Deals in Only 4 Years w/ Derrick Acuff
102: $10M Profit On Her First Deal?! It's Possible with Campground Investing
101: Campgrounds: The Investment You've (Probably) Never Thought About
100: Why Brandon Turner Encourages Rookies to "Start Small and Scale"
99: Buying a 51-Unit Property with 0% Interest and No Money Down
98: Rookie Reply: Lessons Learned from Our First Real Estate Deals
97: 19 Units in 1 Year and Starting a “Luxury House Hack”
96: Rookie Reply: How Much do Property Managers Charge?
95: Buying Your Next Home with This Often Overlooked 0% Down Loan
94: Rookie Reply: Should I Invest in Real Estate or Pay Off Student Loans?
93: Stop Making Offers! Here’s What to Do Instead with Erik Wright
92: Rookie Reply: How to Fund Rehabs and Renovations
91: 8 Units, 10 Wholesale Deals, and $0 Spent on Marketing w/ @Liliinvests
90: Rookie Reply: How to Find the Owner of a Property (Without Being Creepy)
89: Buying Non-Traditional Properties as a Rookie Real Estate Investor
88: Rookie Reply: Analyzing a Short-Term Rental Market
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