Have you ever looked at a rental property and thought, this feels like a good deal, but how do I actually know?

During 22 years as a real estate investor, I've been there too. In this video, I'll show you the simple way I analyze a property. No spreadsheets, no fancy calculators. Just a few quick numbers, you can run on a napkin or an envelope. By the end, you'll know exactly how to tell a good deal from a bad one so you can buy rental properties with confidence. So the approach I use to analyze a rental property is something called back of the envelope

analysis. So you might be thinking to yourself, are you really going to buy a property

worth hundreds of thousands or maybe even millions of dollars with some scribbles on the

back of a piece of paper? And all I can say is that many professional investors have a process

like this, including Warren Buffett,

the most successful investor of all time who said this in a quote, if you need to use a computer

or a calculator to make the calculation, you shouldn't buy it. And what he means by that is to know

a deal is a good deal, whether it's in the stock market or a piece of real estate. It should be

obviously a good deal even with approximate numbers in the stock market or a piece of real estate, it should be obviously

a good deal even with approximate numbers. So you don't need to get to the next to the next decimal

place or have a really fancy calculator to do fancy numbers to know it's a good deal. In fact,

if you have to do all that, you might be trying too hard. It should jump off the page and be

obvious because of the economics of it, because of analyzing it as a business. And that's really what I want to show you how to do today, step by step, how to apply this Buffett-like approach to a rental property, really whether you're a beginner or a more advanced investor. Real quick, if we haven't met yet, my name is Chad Carson. You can also call me Coach Carson. I'm the author of two books about real estate investing, one called Retire Early with Real Estate and the other called the Small and Mighty Real Estate Investor. And on this channel, I teach you how to use real estate investing to achieve financial freedom so you can spend your time doing more of what matters. In just a minute, we're going to get to some simple formulas you can use on your own rentals, but I want to start with an important question of why own rental properties in the

first place. If you're like me, I enjoy the craft of real estate. I really like that we're providing affordable housing to people in our community and we're making a positive impact of our community, fixing up properties and keeping them nice for people. Those are all great and those are really important.

But we also are doing this as a business.

This is a financial investment.

And so for me personally, I like to know that I'm building wealth with my rental properties.

There's a financial component to it.

And because I'm building wealth and I'm growing this income and this wealth over time,

I can eventually get financial independence, the point where the properties pay for my lifestyle. Instead

of having to go work a job and make a salary, you could optionally live off the rental

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