Determining A Good Deal
Hello everyone,
I am somewhat new to all this real estate investing stuff. however, i do own a duplex in the desert areas of southern california that i use to for a tax shelter. i have yet to get positive cash flow from it. my question is for more seasoned professionals or whoever wants to chime in.
aside from location and other factors, when looking at potential real estate investments in terms of just solid numbers, what calculations do you look at to determine what is a good deal ? am i looking at cap rate (what does that term really mean)? from what i read, 10% is a good indicator, but what does that really mean?
i have an example of a prospective property out of state:
duplex , asking price $89,900
each one rents for $550 (estimated)
numbers provided by realtor:
total taxes: $1670
Gross income: $13200
Operating expenses: $4055
Net income: $9145
based on these numbers alone, can someone say that this is a good deal?
im am focused on generating positive cashflow, so what is the general consensus of a successful cashflow scenario (i.e. $200/m or $400/m)? also, how can someone determine past appreciation? is there a website out there that can show me charts?
any feedback in this matter would be greatly appreciated.
thanks,
kp
oh and if you have cash try a short sale!