Real Estate Investing with Coach Carson #462: Is This Rental Actually a Good Deal? (Most Investors Get This Wrong!)
Dec 1, 2025
Explore the nuances of rental property analysis as the host unveils a quick, back-of-the-envelope evaluation method. Discover why most investors misjudge deals that feel right. Learn the critical profit engines: cash flow and equity growth, along with the importance of multiple formulas for deal assessment. Uncover concepts like the rent-to-price ratio, cap rate, and how leveraging debt affects cash flows. Get practical tips on analyzing rentals, building equity, and enhancing your investing skills.
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Use Quick Napkin Analysis
- Use a back-of-the-envelope approach to judge deals quickly without complex tools.
- If a deal needs a deep calculator to look attractive, it probably isn't obviously good.
Two Engines Of Rental Returns
- A rental has two profit engines: income (cash flow) and equity growth.
- Measure deals by how they contribute to one or both engines, not just taxes.
Filter Deals With Rent-to-Price
- Use rent-to-price ratio as a first-pass filter to compare markets and listings quickly.
- Prefer higher ratios (closer to 1%) for cashflow-focused investing and lower ratios imply harder markets.
