KLE 108 – Deal or No Deal?
In the past few KLE’s you learned how to research an area easily but thoroughly, so that you can become an (almost) instant expert in the value of any specific type of commercial building in any single area.
You also learned how to take a dive into the numbers (KLE106) to quickly and – again – easily determine whether the deal is worth taking on.
But, how do you know when the deal is a ‘good deal’ … even the kind of bargain that makes you all sweaty with excitement?
It’s simple.
In addition to knowing the ‘numbers’ for any real estate deal, you just need to know three key – very easy to calculate (with the tools that I will provide below) – ratios:
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This simple analysis (it took much longer to explain than it will to complete the few numbers highlighted in YELLOW on the spreadsheet) requires you to find only four numbers plus whatever expenses you (not the tenant) are responsible for, in order to determine – along with the analysis in the prior KLE’s – if this is a piece of real-estate that you should consider purchasing.
