I am wondering if anyone has a formula that they are using when they are figuring out all of their expenses to determine if a property is going to create enough cash flow to make it a great deal?
Most of the information can be gathered before you even make an offer. Some of the information that I am having trouble with is how to find out what is a reasonable rent for the property? Are you having your real estate agent do that for you? If so, how are you verifying the information they are providing for you? It has been suggested to me to use 1% of the FMV of the house for a rental estimate. Anyone using something different?
Another one I am having trouble with is the insurance. Are you contacting your Insurance Agent/Broker on the property to get the estimate or are you using a formula to determine the estimate?
Are you using the inspection clause and due diligence contingencies to allow you to collect the information after you have placed the offer?
I just want to make sure that I am getting a deal that will generate enough cash flow to make it worthwhile to go forward with an offer.