How to Analyze a Rental Property (Fast, Easy, & Accurate!)
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You found a property that might be a deal. But how do you know for sure? Analyzing rental isn't just plugging in numbers into a calculator. It's about knowing which numbers matter and where to actually find them. And if you skip this step or get it wrong, you could end up with a money pitch instead of a cash flowing rental. And today we're walking you through the exact process we use to analyze properties before we ever even make an offer.

Welcome to the Real Estate Rookie Podcast. I'm Ashley Kerr. And I'm Tony J. Robinson. And today, like we said, we're giving you the kind of soup to nuts, soup to nuts, bolts to nuts, A to Z, all those things of analyzing rental properties today, what's working, and what Ash and I do as we're looking at deals for our own portfolio. You need to have some kind of buy box for your property. You need to know which metric is going to be

aligned with your investment goals. Because Tony could say, I have a great deal right here. And I could say, I have a great deal right here. And they could be totally different outcomes, totally different analysis. And so the first thing you need to do is figure out what are your investment goals? Is it cashflow? Is it appreciation? Is it long-term wealth? Is it

to get a chunk of capital upfront? Do you want to do the burst strategy? Do you want to do a short-term rental? Do you want to do a turnkey rental? So that's really the first step of it is figuring out what you want out of that property. So when you're analyzing it, you kind of have a target of what you're trying to achieve with analyzing the property. Yeah, I can agree more, Ashley. I think so many people jump into the

the idea of investing in real estate without first getting absolute clarity on why they are looking to do this in the first place. So I think it is a great place to start. And I think that, you know, in addition to like your motivation, what I'd also add is also do an inventory check of your current resources.

Like you made a great point, Ash, of like, what's a good deal to you may not be a good deal to me and vice versa. And someone might come to you and say, look, I've got a deal that's going to give you a 25% cash on cash return.

But it's also going to require that you work on this one deal 10 to 15 hours a month. Someone else could say, "Hey, I've got a deal that's going to give you 7%, but it's completely turnkey. And all you have to do is meet with the property manager for 30 minutes once a month." Two very different levels of input, two very different levels of output. So not only are you asking yourself, "Hey, what are my goals or my motivations?" But you've got to ask yourself, "How much time, how much energy am I willing to put into this?"

And that'll help you dictate what is a good deal or what is a maybe not so good deal. There's always trade-offs. You just got to know what you're willing to trade off.

off. As much as everyone says, run the numbers, stick to the numbers, Tony, you just proved the exact point where there are other variables and other considerations to take into account when looking at a deal and your time is a really valuable one. That's a great point that you brought up because that's why a majority of people get into real estate investing is because they want to build wealth

to be able to buy that time freedom, whether that's quitting their W-2 job, whether that's retiring early, whether that's quitting their side hustles so they can hang out with their kids more, like whatever that may be, there's

usually some kind of time that's built into your motivation to actually get into real estate investing. Yeah. I think once you've got some clarity around your goals and your motivations, next it's about the tools and the resources that you need to start analyzing deals. And a couple of things that come to mind for me. Number one,

You're going to need some source of deal flow. And that source could be on market, it could be off market. You pick whichever one makes the most sense for you, for your skill set, for what you want to do when it comes to real estate investing.

On-market tends to be lower barrier to entry, right? Because you can go to a place like biggerpockets.com slash listings and have a lot of what's just actively marketed on the MLS show up in your feed and you kind of go through and pick the ones that make the most sense for you. So there's an ease of going on-market. The challenge though is that it's easy, right? So there's a lot of people looking at those same deals. Off-market, the inverse.

It's a little bit harder to find those deals. Either you're doing some marketing yourself, you're going and talking to wholesalers, whatever it may be. But the goal there or the hope there is that there's a little less competition when you go off market because the property is not being publicly listed. So first, you got to figure out where am I going for my deals?

I will say if you do opt to go on market, and I think this is a big benefit for a lot of rookie investors, is work with an agent who really knows that area. BiggerPockets.com slash agent finder. You can find an investor-friendly agent in most of the major cities across the United States to help you find agents.

those deals that actually work for real estate investors. So I think that's one of the first things is understanding, hey, where am I going to find these deals? And the second thing I would encourage all of you to start thinking about now as well is how are you going to finance those deals? A loan from your local credit union is going to look different than a hard money loan. And a hard money loan is going to maybe look different than a private money loan. So you'll have to think about and consider which funding option are you going to leverage

Because you'll need those inputs as you go to think about what deal actually makes sense. Because maybe a deal looks great if it's a 30-year fixed primary residence mortgage. And maybe that same deal looks terrible if it's a 12-month note with a private money lender or hard money lender. So knowing the debt options, I think, is something to start figuring out today as well. Yeah, and that kind of leads us to your next step as to

what information do you need before you analyze the deal? And a lot of times everyone's focused on the deal itself. Like how do I find what the rent is going to be? How do I find the insurance costs? There's a lot of information that you need to know about yourself first, just like Tony said about how you're going to fund the deal to be able to get accurate terms. So knowing your down payment, if any, and what your loan terms are. So, um,

There's a lot of resources to be able to find out, but the easiest way is to go and get pre-approved for a loan, especially if you have your buy box bill as to what type of property you're looking for. So if you know you're going for a primary residence that you're going to house hack and maybe you want a small multifamily that's two to four units.

You can take that information and you can go to a lender and see what loan products actually fit your buy box because there are so many different options for different things. You're not going to live in this property and you just want to buy a five-unit investment property.

You are not going to be able to. In almost every case, you cannot get residential mortgage on that property. At five units, it's considered a commercial property, and you will have to go to commercial lenders only. And a lot of banks have both types of lenders. They have the residential department, and then they usually have a commercial department too.

where they'll do loans like this for commercial properties. And even though you would think it's residential because there's people living there and it's houses, over five units and more, it's usually still considered a commercial property on the commercial side of lending as an investment property. Even in the BiggerPockets calculators, any calculator you'll find, it'll say purchase price and you input the purchase price. Big disclaimer here.

Just because that is what the asking price is doesn't mean that's what you need to use as your purchase price. So keep that in mind. But that's a great starting point is when you're putting in the purchase price to put in what they're asking for the property. Just to start things out and to see what the numbers would actually look like. And the purchase price is the best number to be able to manipulate and fluctuate to make your deal work.

Because just because somebody is asking $100,000 doesn't mean that's what the property is worth or what it will actually sell for. And if you guys have been watching the news, there's becoming more and more inventory available that's not being bought up and properties are sitting longer for days on market in most markets around the U.S. Yeah.

Yeah, I think purchase price is an important point. And just like one caveat I want to add to that too, Ashley, and you hit the nail on the head with this, but I think...

Because of what you just said, the increase in supply, that we're in a very unique time for buyers of real estate because you have much more leverage as the supply of homes for sale increases than you do when that supply is constrained. So for a lot of you that are out there analyzing deals or looking to submit offers,

Use the fact that there's more supply to your advantage, right? And don't feel that you have to offer what's being asked. After purchase price, the next piece is your down payment in your loan terms. And we talked about this a little bit already, but again, knowing, are you putting down 3.5% on an FHA house hack? Are you putting down 25% on a traditional investment loan through your local credit union?

And each one of those down payment options is going to factor in what your cash on cash return looks like, what your monthly cash flow looks like. A 5% down payment might mean that you have a really good cash on cash return, right? Because you're putting down less cash, but maybe a 25% down payment gives you more cash flow, right? It gives you more actual money every month because your mortgage payment is smaller.

So that's why going back to what your goals are to help you identify which loan product with down payment amount actually supports the goal that you've got. Do you want to maximize cash flow?

Or do you want to maximize your cash and cash return? Okay, so the next biggest piece of this is figuring out what the rental income will be on the property. And this is whether you're renting out the unit, you're renting out to buy the room. Even if you're using like the garage and renting out the garage for storage or somebody parked their cars or charging for parking places, this is where you're going to input all of the rental income that could come in from the property. If there's already tenants in place,

and there's already rental income provided from the listing or from the property owner, use those numbers first. Even if there is room for improvement, analyze the deal with what the existing numbers are because most likely you're not going to be able to change that rental income day one. And so it's good to know what the property will look like when you first purchase it.

Then go ahead, if there is room for improvement, run the numbers showing what you actually believe the market rents would be and see what the numbers look like for that. Be very conservative with your rental income. Make sure you know all of your state and local laws as to when you can actually increase the rental income.

So some states require, like New York, if you've lived there, if somebody's lived in the unit for two or more years, you have to give them 90 days notice to increase the rent. I just saw in Colorado and Denver,

that they put in some new law where you cannot give someone a non-renewal. You have to renew their lease agreement. And then there was like five different stipulations of reasons why you could, like you're going to rehab the whole property or family members moving in. You're no longer renting it out. So make sure you know that.

how to actually increase the rent if that is what you have to do to actually make the deal work. And that's the goal motivation of purchasing this property. So understand all of that before you go and make an assumption, wow, they're only paying $600. I know that I could charge $1,000. Well, even if you know that unit code rent for that, make sure that you're able to

issue and non-renewal to get new tenants in there, or that you're allowed to increase the rent. Some local areas have a percentage where you're only allowed to increase the rent by X amount. So be very, very cautious of those laws and regulations. If you go to bearpockets.com slash resources in the resource hub, you'll find the section that says property management and landlords. And there's actually a map of the U.S. with

all the states and you can click on your state and you can at least see what the state, um, laws are. And then you'll have to do a little more Google searching to actually find your specific, you know, county or city, uh,

ordinances and laws and regulations as far as rentals. But to actually find the rents, you want to do comparables, just like you would comp a property to find out what the value of that property is. You can search on Zillow, see what the current listings are. You can call local property management companies, even go on their websites because they always put all their listings on their websites. Apartments.com, there's so many different places you can find listings and

When I first started investing in real estate, this is so time consuming, but it helped me understand my market so much better. Every day, I would look at the listings. I would put them into a spreadsheet. The next day, I'd go back. I'd look at the listings. I'd add any new ones. And I'd also look to see which listings were taken down. So everything.

I don't know for sure, but in most circumstances, a listing is taken down because it was rented. So I would notate that that property was up for 13 days and then it was taken down. If something was rented pretty quickly, I could assume that it actually went for what they were asking for.

In my current market, there's not any negotiation for apartments, but that does happen in some markets where it actually could have gone higher.

Or it could have gone lower. Also be careful, too, when you're looking at comparable listings as to, like, some areas may do two months free to move in. When I started as a property manager in 2013, that was...

One thing at the 40 unit apartment complex, that was one thing they were doing was they were offering one month free to try to attract people to move into the property. So if that's happening to like if you're not going to offer some kind of bonus like that.

You can maybe not charge as high of rent as them because when you take only paying 11 months of rent, you're going to end up being cheaper for the year.

than 12 months per rent, obviously. So someone would look at that and say, well, obviously I'm going to take the one with one month's free because over the course of the year, it's going to be cheaper. So make sure you're actually reading the descriptions and listings, the amenities, things like that to see what's included too in those listings. And honestly, the BP Rent Estimator tool is, I think, one of the coolest things they've built out because it's pretty darn accurate. It had just rolled out

I believe not too long after I got my first long-term rental. And I remember going back and like plugging my numbers in just to see like, Hey, what did the tool think I should rent and what did I actually rented for? And it was like a $25 variance of what I actually rented and what the tool said it should rent for. So pretty spot on. And that was several years ago that we, that I ran that, that little experiment. I think just one huge thing to call out in terms of data sources, you should not use is,

are the pro formas provided by the agent. The pro formas are always going to assume the best. I think it's always the most optimistic version of how that property could potentially perform. And if you underwrite based on the pro forma that you're getting from the listing agent, from the broker, there's a good chance you could

end up with a property maybe doesn't meet your expectations. So I think Ashley's breakdown of where to go to find the right data is what all of you as rookies should be relying on. And I just want to second the idea of talking to local property managers. When I was hunting for my first long-term rental, that's what I did. I called several property managers in that area and I just gave them my buy box. So I'm looking to buy a three bedroom, one to two bathroom property in this zip code.

typically speaking, what do those rent for? And you talk to a couple of property managers, you start to get a really good sense of, okay, cool, this is actually a very fair and solid number. So let the PMs who...

for a living, look at rent figures and try and make sure they're always priced appropriately. Let the hard work they've done serve you as you look to get your first deal. So Ash, we talked about purchase price. We talked about income. And when I think about analyzing the deal, I guess there's three kind of big buckets. You have your acquisition stuff, which is your down payment, your closing cost, you

your mortgage details, all of those things. You've got your income, which is how much rent are you charging? What other ancillary income do you have? But then the third big category of analyzing a deal are your expenses and all the things you have to pay for as a landlord to keep that property running and hopefully keep it profitable for you.

And when I think about expenses, there are really maybe two different kinds of expenses that folks should focus on. And I guess the last thing I'll add with having tenants in place are already in the property is make sure you're also doing an estoppel agreement. Like this doesn't have to do much with analyzing, but when you actually have the property under contract and you're doing your due diligence to really tighten your analysis of the deal, the estoppel agreement is given to the tenants to fill out information about the

the lease agreement and about the terms. So especially if there wasn't a lease agreement in place or it's very vague, you know, there's, you can get some of these questions kind of answered and compare them. What is the seller saying? What is the tenant saying? Who pays what utilities? So, yeah.

Maybe in the listing it said that, oh, tenants pay all utilities and then you get the estoppel agreement and the tenant says, no, I don't pay for the water or the gas. Like that can really eat up your cash flow if you're paying for those utilities. So it's just a great checks and balances when you go under contract and you're in that kind of inspection period if you do that.

put that kind of contingency, but it's still good to do. Even if you have no kind of clause to back out, still understanding what you're getting into before you actually close on the deal. Hey guys, it's Ashley. I wanted to pop in here real quick to tell you that managing rentals shouldn't be stressful. That's why landlords love rent ready. Get your rent in your account. Just two days, faster cashflow, less waiting. Need to message a tenant? Chat instantly in app.com.

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All right, guys, we're back talking about how to analyze deals. So the two types of expenses you'll typically see on a rental property are fixed expenses and your variable expenses. Your fixed expenses are things that are, like they sound, a fixed number every single month. So this could be things like your mortgage payment, right? Your principal, interest, taxes, and insurance.

With a high degree of certainty, you know what those numbers are going to be every month for the life of your ownership of that property. Things like your, I don't know, say you pay for internet at your property. Say you pay for your landscaping fees. Those are things that every single month is going to be the same number month in and month out. Those are very important.

straightforward to plan for. And you just want to plug those into your analysis, whatever that fixed number is. Your variable expenses are where things tend to get maybe a little bit more tricky, things that aren't the same figure month in and month out. And when I think about variable expenses, I think about things like, I don't know, say your utilities costs, right? Those are things that are going to vary pretty wildly from month to month.

For me, with our short-term rentals, our consumable costs, those are things in theory from month to month. How much we spend on paper towels and toilet paper and soap one month could be different than what it looks like in a different month. Gosh, one that's kicking our butt right now is our pool heating costs.

You know, when the weather starts to turn and people are really using the pool more often, they want the pool heated. That's another cost we have to take into account. So as you go through all of your expenses, you've got your fixed and you've got your variable and you want to make sure that you allocate each one appropriately. What are some other expenses actually that we didn't hit? Yeah. So I think like a big thing that I see a lot of people leave out are your tax return filing expenses.

your bookkeeping fees. I mean, you could do your own bookkeeping, but as you accumulate a couple properties, you may have to outsource it. So in most cases, because you're adding on work for whoever files your tax return, there could be an added cost for that.

So those are like the bookkeeping, the, even the LLC filing fees. Like every year I pay a $25 fee per an LLC. And Tony isn't like California, like $800 or something. It starts at 800. How many people do you think analyze their deal and like,

forget about that $800 that's added in because it's not a direct expense to the property. So if you are doing some kind of corporate structure like an LLC, you may not think of these things. And I've seen people commonly forget about these things. And even though it's not a direct expense from the property, it's still something you had to create for the property and should be paid from

the income of the property. And along that same vein, your software costs as well. You know, if you're using property management software, if you're using software for, uh, maintenance, if you're using software for rent collection, like whatever it may be, uh, I think also remembering that once you own this property, there's software you're going to need to help manage it and accounting for those costs as well. And then the last two that, um,

I think we've seen a lot of rookies overlook as well are your vacancy and your capex costs. Vacancies, you know, you're...

Vacancy isn't necessarily something that you have to pay every single month, but the goal is that you're setting money aside for that eventual day when your property is vacant. And that way you're not spending money out of pocket to cover the mortgage. There's just money that's there that you've been accumulating to cover that day when your tenant moves out and you need to replace them with someone else. CapEx is the next one where again, it's not a cost that you have every single month,

But when your water heater goes out, you've got a fund of money that's set aside specifically for those kinds of repairs when your roof needs to be replaced.

which will need to happen at some point in time. You've got money set aside specifically for that. So your CapEx, your vacancy are two additional costs that aren't really costs, but you still want to make sure you're setting money aside for, for when those costs eventually do turn their head. I actually have a little rant about this, Tony, that I'd like to go on right now. It's a new segment. Ashley's ranted. So yeah,

When you would see any calculator, even the bigger pockets calculators, and you talk about vacancy, it is very commonly talked about, like, as you said, like you're setting aside money every month. And I want to like clarify what that actually means. You should actually already have this money set aside before closing.

So you should have three to six months reserves set aside so that if you do have a vacancy, if you do have, you know, a capital improvement, you already have this pool of money.

But what you are doing when you analyze the deal, you are not saying, oh, I have this $10,000 in reserves and adding that money into the analysis. There's no spot in the spreadsheet for that. So instead, what is done is the rental income is broken down into pieces so that.

It's like, okay, you're saving this X amount, but that amount should already be saved. It's just estimating for you to show you a very accurate analysis. If you were to use 10% of your savings, your reserves, you should be taking your cash flow and replenishing that amount. So I want to make that like very clear that you should not be

putting away money every month. And I know that's what everyone says, because you should already have that money saved. And then you should just be replenishing it as needed when you do pay out of it already. And I think that's sort of like a really big misconception is that like you're dumping 15% every month into a reserves account and

But you're not. You already have that reserves in place. So...

Your numbers could look great. You have no vacancy. You have none of these variable things that come up, such as like capital improvements. You don't have to dip into those reserves, but when you do, you'll have to replenish it over, you know, however many months for what you needed to use and taking that 15% out and just planning ahead like that, like knowing you would need to spend that money. That's what it's doing is it's estimating that

Every month, 15% of the rental income is what you'll be spending on those things. And it could be way more, it could be way less, but just to have at least some kind of buffer for yourself to know what the actual analysis of the property is, um,

When I did my first property, it was very back of the napkin math of just like, here's the rental income, here's what the expenses will be, and yeah, this is what my cash flow will be. And that's very unrealistic. And I think, too, don't get too caught up with what other people are saying, their cash flow, because it is very, very difficult to very accurately calculate

tell you what your cash flow is going to be every single month. It is going to vary every single month.

If you have these variable expenses that come up. That wasn't too bad of a rant, actually. That was pretty good. That wasn't too bad. I can live with that one. Well, so for the rookies, I think you all understand now that there, again, are three main categories you need to understand as you're analyzing your deal. There are your acquisition figures, purchase price, down payment, closing costs, etc. There's your income.

And then there are your expenses. And as you fill in all the data points for those three main categories, you start to get a picture of what this deal is going to do. Now, how do you actually run the numbers? You've collected all of this data. How do you actually run the numbers? So, rookies, you guys all now understand that when you analyze a deal, there are three big categories. You've got your acquisition costs, your down payment, your closing costs.

You have your income, right? How much you're generating in rent and other income producing activities on your property. And then you have your expenses, both variable and fixed. But now that you've got all of this data, how do you actually use it to analyze a deal? So Ash and I will be walking through that right after this last word from today's show sponsors.

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All right, guys, we're back. And we're going to talk about, hey, you've done all the work to find these data points. How do you turn this into an actual analysis of a property? And I think what I want every single person listening to this episode to do is to focus on using the right tools to help you analyze. There are tons of rental property analyzers floating out there.

But I think for the folks of this podcast, the best place for you to go is using the BiggerPockets investment calculators. Ashley and I both, like our first deals, were running through those same calculators. And you can go on the forums right now and probably find Ashley's post talking about some of the work she's done in the calculators, me sharing the work that I did on the calculators as well. Like they literally helped us get our first deals. And I think the reason those...

calculators are so helpful is because the way that they're built, it's hard to forget any of the important details that we've talked about so far. It forces you to make sure that you're accounting for all of the right data points as you're going through and that the actual math behind each of those is correct as well. I can't tell you how many people I've met who built their own spreadsheet and turns out they fudged some formula somewhere and the numbers look much better

than what they actually were. So just make sure you've got a good tool, I think is the first thing. But basically, you're going to take in all that information that you found, plug it into one of these tools, and then going back to what we said at the top of the show, like what is your goal? The tool is going to give you your NOI, your net operating income. It's going to give you your cash flow. It's going to give you your cash on cash return. It's going to give you your cap rate.

And you can evaluate that deal based on all the data that gets spat back out to you. So again, using the right tools is the best way to analyze these deals quickly and confidently. The last point I want to hit on for talking about deal analysis is where to actually find some of these numbers. So we went kind of deep into the actual estimating of the rent, but what about some of the expenses? So

Some of them you can verify online or requesting by a piece of information, and they will be somewhat similar. So let's start with like the property taxes, for example. You should be able to go to your tax assessor's website and pull the rent roll. A lot of cities and counties actually have a really nice online system where you just put in the address and it will...

have you select the tax year, if you want the school taxes, you know, the town and county taxes. In my area, we have village taxes in some towns, so you can select which one, and then you can get a copy of

of what the taxes were for any year, any time period. With that, make sure you are reading the taxes. So on it, it will say what the property is assessed for, and this is what you are paying taxes on, this percentage, okay?

the percentage of tax on that amount. So if the tax property taxes say that it is assessed for $49,000 and you are buying this property for $250,000 at some point, when your town does a reassessment, they are going to see the sale of the property was sold for

or $250,000, and there will most likely be an increase in that assessed value, which will increase your property taxes. Okay? So we're actually seeing this a lot. Like, I just read an article about someone in Florida whose property taxes went from like $18,000 to $90,000 when they were reassessed.

Ashley, was that the couple that renovated their forever home? Yes. I saw that article too. That was crazy. It written into the code or something was like, their house was basically being assessed as a new build because of something they did. I can't remember exactly what it was. I think they built up, added a second story, and their house became classified as a brand new build and their taxes went up that much. Yeah.

Even still, like, Florida's even talking about getting rid of their property taxes. That's just something to be very cautious of and understand. The owner of the property has a VA exemption and gets a discount on their property taxes. Your taxes will be higher.

If they have a homestead exemption because it's their primary residence, like in New York, we have a star savings. If you are not occupying that residence, you will not get those discounts. So make sure you're looking for discounts on the property taxes to make sure that you're not thinking your property tax is going to be the same. It could be different.

Um, this one I struggled with for a really long time and still kind of do Tony is the insurance piece as to like, if you've never bought a property in this market, how to estimate what the insurance is. Like, I know I'm paying about 800 bucks or duplex or landlord policy in this one market I invest in. Okay. On average, that's what it's going to be.

But if you're going to a new market, you don't have those previous policies, previous experiences. So on BiggerPockets, they do have, I don't even know what it's called, but you can quote out your insurance. So if you go to the deal analysis tab again, there is like you can put in information and it will give you a quote as to what it would estimate your insurance would be for that property. So biggerpockets.

Honestly, the best way to get an accurate insurance quote, go into the BiggerPockets forums, ask other people in this market. Here's the property I'm looking at. This is the type it is. What are you guys paying in this area for a landlord policy?

Take it with a grain of salt because their policy may be different, completely different than what you actually need insurance for. They could have a wood-burning stove, which would increase your premium because it's more liability where yours may not, so yours may be cheaper. It is still hard to compare apples to apples unless you're looking at the two policies and understanding the differences. I think the best thing is to get an insurance broker, right?

OK, almost like a lender that's a broker where they can shop out to many different companies. If you go to like Allstate, State Farm, like you're specifically only getting access to their type of product where you go to a broker and they can shop it out to multiple insurance companies and bring you back money.

different quotes and go walk through with you comparing them. So as you're analyzing deals, this definitely would be a waste of a broker's time if you continuously go with them like, hey, I'm analyzing this deal. Can you quote it out for me? And then you don't actually start buying all these policies because you're just analyzing deals. So I think it's best to find a broker. Like if you're already using someone for your

home and your auto, like go and talk to them and ask them, like, are you covering any other type of property? You can also ask the real estate agent what the current person is paying and a copy of their policy. And I think that's kind of like my same advice for the utility costs too, is ask the seller for copies of the current bills. All really valid points, Ashley. And just, you know, you

You mentioned insurance being a sickie one for you. I couldn't agree more. I think the best way if you're going into a new market is having a broker, getting a bunch of quotes. But you could even do that as you're shopping for deals because you really just need a ballpark when you're doing your initial underwriting. You're still going to sharpen those numbers up once you're under contract. So say you're looking at a new market, you've never purchased anything there before, you're

find a deal or two or three and send those three deals to maybe two or three insurance brokers that work in that area. That means you're going to get back six potential quotes

Those are numbers that are good enough to use in your underwriting moving forward. I agree with Ashley, don't send every single dude you're thinking about buying. A, there's just a lot of work for you and B, people probably want to get bored of doing that very quickly for you. If you do it once, you're doing your initial underwriting, I think it gives you a good foundation. Then when you're under contract,

Then you can really more aggressively shop that deal to multiple insurance brokers because you're in a contract, right? And you're going to need insurance to close on that property. So before we close out today, we actually have something exciting for you guys that we're going to be doing. This is the first time that we're doing this, but we have a challenge for you guys.

So I'm more excited about the prizes of this. Like I want to enter it to win all of this, but there's a big prize and we just need you for seven days. So you can go to biggerpockets.com slash seven day challenge. Okay. So Tony, what is this challenge about? So the goal of this challenge is to get all of the folks in the rookie audience to do exactly what we just talked about in this podcast, analyze more deals,

I guarantee I've never met you, but probably if you haven't closed on a deal yet and you've been listening to this podcast for any length of time, the reason you haven't found a deal is simply because you have not analyzed enough deals yet.

The goal of this challenge is to kickstart your journey on analyzing more property. So what it is, you guys have seven days. Starts today, the day that this podcast airs, June 16th through June 23rd, right? 1159 Mountain Standard Time, June 23rd is the last time we'll accept a submission. When you go to biggerpockets.com slash seven-daychallenge, it'll take you to a forum post. All you have to do is comment in that forum post to say, I'm in.

That means you've entered in and then at any point during that seven day window, you submit a second post that contains all the deals you analyze. Now there are some stipulations on how we're going to track who does what. You'll see all the details of that in the forum post there, but that is all you have to do. Go to the forum post, say I'm in, drop your seven analyzed deals, and then we'll pick a winner at random.

And like Ashley said, the winner is going to get some pretty cool BP prizes. So first thing, we're going to give one free year of a Pro Bigger Pockets membership. And if you guys don't know, Pro comes packed with lots of tools and resources for folks who are really serious about growing and scaling their portfolio. Number two, you're going to get a free ticket to BP Con.

All right. The annual BiggerPockets conference, which this year is in Las Vegas, is going to be one of the best conferences that we've had. Thousands of other real estate investors all in the same place talking about real estate investing. You get a free ticket. And then finally, you're going to get a $100 gift card to the BiggerPockets bookstore. That way you can buy 10 copies of Real Estate Partnerships that Ashley and I co-authored together or whatever other books you want to pick up. So those are the three things you'll be getting.

Pro annual membership, BP con ticket and 100 bucks to spend at the BiggerPockets bookstore. So again, head over to biggerpockets.com slash seven day challenge. Well, thank you guys so much for joining us on this episode of how to analyze a deal. I'm Ashley and he's Tony and we'll see you on the next episode.