In the fast paced world of real estate investment how do you rise about the rest?

How do you stay competitive in real estate investing? Well, it’s not easy. Many investors give up, uttering the common refrain “I can’t find any deals” or “The deals don’t make sense right now”.



In this article we’ll identify two ways to compete and win, regardless of market conditions and the quality of deals available. It boils down to two simple ideas that will  keep you in the game for the long haul:

1. Build a solid network of trusted deal providers who can provide you with off-market deals. 

2. Use the intentional “LAPS” technique to quickly analyze the deals you receive and make solid offers.

It’s All About Your Network of Deal Providers

You need a network of local deal providers (brokers, wholesalers and property managers) who enjoy working with investors, understand their unique needs and are willing to take the time to build a trusting, long term relationship with you. After you identify people with these mindsets, ensure that they know, like and trust you. Once you represent an opportunity to investors, they will start bringing you the coveted off-market deals that rarely make it to the MLS. These deal providers want to know that you will close their deal and they will benefit from you long term. Remember, if you are reviewing a deal on the MLS, it has most likely been reviewed (and rejected) by multiple investors for a variety of reasons – usually price and repair cost uncertainties.


How do you find people to bring you off-market deals? There are a lot of brokers and property managers out there and a quick Google search will quickly uncover the major players in your market. Then it’s about having meetings (i.e. interviews) to see if they are on the same page and willing to work with you to bring you deals. To find other real estate professionals, for example wholesalers, check out your local REIA (Real Estate Investor Association) meetings and events. Finally, national conferences and online resources are great to engage and meet national deal providers. A few examples include The Best Ever Real Estate Conference, the National Multifamily Housing Council (NMHC) Annual Meeting, and BiggerPockets.Com Real Estate Forum and Online Community.

After Building The Network It’s About Thorough Analysis and SPEED

When an MLS off-market deal becomes available, the critical factors in gaining an edge against competing investors are speed and financing. When a good deal comes across our desk, we quickly identify it. More importantly, our network of people who bring us off-market deals already know we have financing ready to close on a deal as long as it meets our criteria.

Our Analysis Process: Run “LAPS” Around the Competition



In the spirit of March Madness, we thought it would be fun to take you guys through what it really takes to analyze deals. Think of it as a bracketed competition like the actual basketball tournament. If you have 100 deals, which ones beat out the others during each round of analysis and number crunching? Which rise to the top and make it to the semi-finals, finals, and ultimately, the championship (worthy of actually closing on).

So what processes and systems do we use to select that one champion deal that stands above the hundreds of other deals that cross our desk each month? How do we quickly sift out the deals that don’t fit our criteria or financial requirements and make sure the one we close on is going to be profitable?

We use a system called LAPS: Leads, Analysis, Proposal and Success.

Breaking down the LAPS System:

Leads: We gather leads for deals from a number of sources, including MLS aggregators, real estate brokers, wholesalers, etc.  These sources already know our criteria and will call or email when a new property become available on which we’re willing to make an offer.


We use a number of quick screen tests or “rules of thumb” to decide whether or not a lead is worth further analyzing.  One such rule of thumb is location criteria. A property must be a solid B neighborhood otherwise it is automatically discarded. Another rule of thumb is the 1% rule, which states you should only target properties where monthly rents are at least 1% of the purchase price. For example, if your purchasing a $100,000 property you should receive monthly rental income of $1,000. If a property doesn’t meet this rule, we’ll move on and continue analyzing new leads that do meet this rule.

You’ll need a good number of deal sources to keep your deal flow consistent, so ensure you’re constantly building your network of industry professionals who know your criteria and can bring you regular off-market deals.


If in a typical quarter we analyze 300 deal leads, only 100 or so will actually meet our location and basic investment criteria. From there, we dig a lot deeper into the deal to see if it fits our other criteria for investment.  


We break down property analysis into four financial categories:

  •   Expected Rent – What is the rent we think we can get for the property.  We do this by using,, property manager estimates and broker opinions.
  •  True Expenses of the Property  These include: mortgage, HOA, taxes, insurance, Water, Sewer, Trash, Electric, Gas, Lawn care/snow removal, property management fees, repairs and maintenance, capital expenditures and vacancies.  All of these must be taken into consideration before you can determine your cash flow number.
  •  Repair Costs – Get the opinion of a reputable contractor and/or building inspector on what the expected repair/remodeling costs will be to get the building to a condition where you can charge market rents. Does it need a new roof or HVAC system? Does it need a cosmetic update? Is it turn key and not needing any work at all? These all need to be factored in to your analysis.
  • After Repair Value – or “ARV”, after we fix up and repair the property and bring it to market rent (stabilized), how much would it sell on the market for?



After we’ve weeded out properties that don’t meet the 1% rule and completed initial analysis based on the four financial components described above, we put each remaining deal through four final criteria tests to determine whether they’re worth making an offer on:

  1. Cash Flow – We invest in deals that cash flow positively after taking into consideration all deal expenses. We aim for a cash flow o $100 per month per unit.
  2. Cash on Cash Return on Investment (CoC ROI) – deals must earn at least a 9% return on our cash invested in the deal.  The average stock market return is around 5-6%.
  3. Equity – We buy properties between 20%-30% below MLS market price. We can determine how much upside value we are purchasing by conducting a comparable sales analysis in the property’s neighborhood.  How much did a similar building nearby recently sell for?
  4. Total Return – or (Total profit/Total Invested) – This is how much you make if you hold the property for X years. We shoot for an average 15% return over the course of the deal.


Proposal or Offers made: Of the 100 deals we analyze, only about 10 pass the four criteria tests required for us to actually make an offer. We’ll put offers on all 10 of these deals and then see which get accepted.


Success – Typically out of 10 offers made, only one gets accepted. As real estate investors your offers will usually  be much lower than those of retail home buyers, so it’s less likely they will get accepted. That said, this is a numbers game, and just like in basketball, the more shots you take, the more often you’ll hear the swoosh of a closed deal.

There are a number of tools out there that can help you with this analysis, including BiggerPockets and Michael Blank’s Syndicated Deal Analyzer.


There are a number of tools out there that can help you with this analysis, including BiggerPockets and Michael Blank’s Syndicated Deal Analyzer.

A Little More On Timing and Speed

We push deals through the analysis pipeline as quickly as possible (usually within 2 to 12 hours). Once we find a good deal, we’re ready to make an offer. But before we do that, let’s talk for another minute about timing, as this is an enormous part of gaining a competitive edge.



“When it comes getting an offer accepted, you need to be first OR last, but never be in the middle”

What does this mean? If the listing is on-market, the first offer received is what the seller measures all other offers against and there is a natural bias toward the first. So making a first offer that is investor-grade, market appropriate and defensible, will give you an edge. If you properly analyzed the deal using the technique above and sought the opinion of the deal provider, you can be assured that your offer will be respected and considered.

If you can’t make the first offer for some reason, then wait for it to sit for awhile. This time frame can only be determined by the heat of the market and the price of the property, but usually if it has been sitting for 30-90 days, the current price isn’t market appropriate. If you get a sense from the listing agent that offers have significantly slowed or stopped, maybe it’s time for you to bring an offer to the table. If you time it right, and the seller wants to get it over with, then your investor-grade, market appropriate offer may be accepted.



Are you interested in long term real estate investing or want to learn more?  We are always looking for investment partners.  Connect with the team at Akras Capital.  We’ll point you in the right direction, or show you how we can easily partner up on a future deal.