150: Rookie Reply: Which Rent Numbers Can You Trust When Analyzing a Deal?

Real Estate Rookie

BiggerPockets

How To, Education, Business, Investing, Entrepreneurship

4.8 • 1.7K Ratings

🗓️ 22 January 2022

⏱️ 19 minutes

🔗️ Recording | iTunes | RSS

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Summary

Ashley and Tony’s Instagram DMs have been blowing up! This week’s question comes from Collette through Tony’s Instagram direct messages. Collette is asking: Do you make offers based on pro forma or actual rent numbers? If you’re a real estate rookie or a residential-only investor, this may be the first time you’ve heard the term “pro forma” before. A real estate pro forma is simply a spreadsheet or document that projects the estimated financials on a property once capital expenditures, rent increases, or other improvements have been put in. So, should you trust those numbers? Here are some suggestions: Remember to “trust, but verify” and always run your own numbers on projected income Use multiple different investor scenarios: pro forma, current numbers, worst case, etc. Take into account the holding cost of performing a large rehab on a commercial property Calculate your working capital and CapEx budget needed to acquire the property successfully And more in the episode… If you want Ashley and Tony to answer a real estate question, you can post in the Real Estate Rookie Facebook Group! Or, call us at the Rookie Request Line (1-888-5-ROOKIE). Links from the Show Real Estate Rookie Rookie Facebook Group Real Estate Rookie Youtube Channel Rookie Podcast 103: From Restaurant Waiter to 100+ Deals in Only 4 Years w/ Derrick Acuff Instagram BiggerPockets BiggerPockets Rent Estimator BiggerPockets Pro Membership Zillow Craigslist Facebook Marketplace BiggerPockets Calculator Reports Check the full show notes here: https://www.biggerpockets.com/rookie150 Learn more about your ad choices. Visit megaphone.fm/adchoices

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0:00.0	Hey, before we get into the show, I wanted to mention bigger pockets is hiring a full-time
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0:33.3	forward slash jobs to apply for an open podcast producer job. Now, enjoy the show.
0:39.7	This is Real Estate Rookie episode 100 and 50.
0:49.1	My name is Ashley Care and I am here with my co-host Tony Robinson Tony. Can you believe
0:54.6	it's episode 150? I cannot believe it. We're halfway through the 100s making our way towards 200
1:01.9	and that this is your first time joining us here at the Real Estate Rookie podcast. Every week,
1:06.5	twice a week, we bring you the inspiration, the motivation, the education, everything you need,
1:12.2	the stories to get started as a Real Estate investor to build that portfolio and eventually find
1:17.4	financial freedom. You guys know the drill before we get to the episode, let's hear a word from our
1:23.6	show sponsor. Oh no, are you still looking for on market real estate deals? Come on guys,
1:31.2	we taught you better than that. Stop scrolling through those listing sites. The best rental properties,
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1:42.4	From driving for dollars to pulling owners list, marketing direct mail and more,
1:47.0	deal machine gives you everything you need to easily find your next profitable property.
1:52.3	If you haven't heard, deal machine is the all-in-one real estate tool and they even have a new AI
1:58.8	assistant, Alma, who can instantly analyze properties, get answers to any real estate question,
2:05.2	and connect with property owners faster. Plus, their weekly live webinars bring in industry experts
	...

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