Is This a Good Deal? My Real Estate Checklist Before I Buy

Before buying any investment property, you need a system.

In this episode, I break down exactly how I analyze real estate deals before making an offer. After handling 50+ deals in one year in the Pittsburgh market — including flips, rentals, and construction projects — I’ve learned what separates a profitable deal from an expensive mistake.

Too many investors:

• Overpay

• Underestimate renovation costs

• Ignore big-ticket items

• Rush into emotional decisions

• Skip inspections that cost thousands later

In this episode, I walk through:

• How I evaluate price and location
• What I check before even leaving my house
• Understanding ARV and renovation spread
• What to look for during a walkthrough
• Why time matters just as much as money
• Sewer inspections and major deal killers
• How I decide if a deal works for me

Remember:

You don’t need an investment property.

You want one.

And bad decisions cost thousands.

If you’re serious about real estate investing, rentals, flipping houses, or building wealth through property — this episode is for you.

Transcript

SPEAKER_00 0:00

Before buying an investment property, I go through this list and I check for these things and then I make the decision if this is a property or an investment that's worth making or should I just look the other way and find the other one? And remember, you do not need an investment property, you want one. So making a large decision can cost you thousands of dollars. But if you're asking me Omar, how do you know about real estate? Or if you're new to this channel, my name is Omar Mohammed and I own real estate rentals in a construction business. Last year alone we did over 50 deals just here in the Pittsburgh market. So we've done so many deals from bad deals to good deals for us. We help doing it for others, and we only work with investors. In the construction business, we only work with investors. So we've done a lot of deals for other people that some of them went over asking, some are still sitting on the market as we ask. And all of them I learned something from. I'm gonna share with you my list and how I select deals so it can help you pick the right winner as well. Make sure you stick to the video to the end because the last few ones I'm sharing are extremely important that will save you thousands of dollars and years of trial. In the beginning, when a deal comes across my desk or something gets my attention, the first thing I check is of course the price. So you gotta get familiar with the areas and what our things are selling for. Before I get off my couch and go to a house that I waste time on it, I check the house, check the location, and I check the price, right? So I take a look at a picture. If there's pictures, I open the pictures and I look through because speed and time kills, especially when you're looking for deals. Like today, I was looking for one, I texted to my realtor and he responded back, just went under a contract. And I literally responded, speed kills. You gotta make sure you're spending the time, which is the most important asset you have, on more worthy deals than others because there's a lot of bad deals out there, and then I can determine quickly if it's overpriced or underpriced, if it's an opportunity or not. And you can learn that I have videos talking about what makes a deal a deal. So make sure you subscribe, check the older videos, you'll find some that can help you what actually is a deal. So once I check and I see that it's priced well and it's a good desirable location, and for location, it really depends. If it's a flip, then there's locations that grow fast, right? And from doing it for quite a few years, I know my market well. I know what would go sell high and what would sit on the market for a while or might just have some issues. So if it's a flip, but if it's a rental, I look at the price more because cash flow, right? I personally do not care as much about appreciation, I care about cash flow right now. Going back to it, once I I looked at and it passes that, then I set the appointment to go see it. And then the picture also gives you some idea of what to look for. The roof might not look so good in the picture, but you cannot decide. When I go there, I make a note. So do not make all these calls till you actually see it or send a contract or somebody who trusts to see it. I make some notes when I go there, what do I want to see? So if it is in the right location and priced well, then I go ahead and go check it out before I make my offer. Now, another good tip to check is the ARV, how much spread there is. So if you see priced at 50,000, but the ARV is 350, you know that's a hell of a deal, right? But you probably should consider why it's being sold so low. But if it's at 350 ARV and it's being sold for 300, you might see that there's not a whole lot of opportunity there. So you should go there, expect it. Pretty much almost done. So that gives you an idea, the selling price is what condition the property is when you deduct it from the ARV. Now, when I go there, I start by walking outside always, right? Take a look at the roof, uh, take a look at the gutters, fascia board, downspout, just the house from outside. You know how much water, especially if it's been vacant, which a lot of these houses have been vacant for years. Look how much water has gotten into there. Because you might look fine to you till you actually start ripping all this old plaster out, and it's really, really in a bad condition. So if I see the roof has been, you know, ignored for years, the gutters are broken, uh, no downspouts, then I know there's probably been some water issue. And then I take a look if there's off-street parking, any benefits I have. I take a look at the electric meter outside. When I see electric meter, I know that the electric has been on. That's a good sign. These old things I take in perspective that happen in my mind so quickly that helps me make the decision. And then I take a look at the houses next door. You know, if it's a flip or if it's a rental, I look at what kind of like tenant would want to move here. You know, things are renting for 2,000, 3,000, which 3,000 really doesn't happen in Pittsburgh. But if it's renting close to the$2,000, would the tenant want to live here versus the competition? And then if it's a flip, of course, I take a look at the houses next door, the neighbors, and just for anything that I might not know. Then when I walk into the house, I start thinking about renovation numbers. Well, all the work that's gonna have to go to. So let's say I like all that and I still think it's a good deal. When I walk inside, I start thinking about how much money has to go there. Here's how I do that I go by order, the demo, just my same list. And if you don't have that list, you can you can leave a comment below, ask me about it, and I will send you a breakdown of a list uh of I go by. So so once I go by my list and calculate my numbers, which is very important to do, to do an estimate, then I go back and I do my homework. But let's talk about the walkthrough a little bit because a lot of you guys have asked me what do I really look at? I look at things that not just flooring, painting, and that. And if you're very new to this, this would help you. I look for like big ticket items, re-plumbing, you know, rewiring the house, the service and panels. There are ductwork everywhere and it's good, or there's no duct, or the old boilers are busted and broken, and then the windows, the doors, how big is the house? Right? The drywall is one of the biggest items that you barely hear people talk about. Will I need to redrywall this whole house? And then when I make my number, I leave myself a little bit of room. There is 2.5%. There's a study that there's only 2.5% of all construction projects worldwide that finish on time and on budget. So if that doesn't scare you, I don't know what else would. So you gotta make sure you're calculating your numbers really correctly and you're not rushing through the process. Well, once you have this numbers out and you walk the property and you have a good feeling about it, I go back and I run my numbers. If the deal works, what do I mean by that? I look at how much time it's gonna take, how much money it's gonna have to be taken into that. And you can say, okay, Omar, well, you're not using your money, you're using hard money, other people's money, whatever it is, but could I have put that money in another one or two or three deals that will have a better return? And I look if that deal works for me. Again, I look at the ARV, let's say it's a flip, I look at what it would sell for, I look how how much money needs to be put into this project and then the return. And I could calculate if it's worth it for me or not. I do not look at like, you know, standard 70% roll, whatever people say. I do not do that. I just look if it works for me. Might not work for a lot of people, but if it works for me, I go ahead and seek it. So sometimes for rentals as an example, I like to buy them cheaper, that takes a lot of work because we can build equity in them. That's what I like. I do not like rentals as an example in a nicer neighborhood. Right now, maybe in the future I will. Because if I can spend, let's say,$200,000 and buy one house that will rent for$15, or I can spend the same$200,000 and buy two houses in a different neighborhood, maybe a little bit lower, or rent for you know$2,500, I'll go for number two right now. Why? Because I'm thinking about cash flow more. So if the deal works for me and I like it, then I go ahead and I make my offer. The biggest mistake I see people do is they will underestimate the renovation or overpay for a house. So the house again might be listed for let's just say$100,000, and then you know it needs another hundred, and then the ARV is like$270,000. Listed for$100,000, you need to put$100 and the ARV is$270. Then they ask for your best offer by tomorrow. You go ahead and you say, okay, you know what? The$100 for renovation, I'm sure we can cut it down to 70. Let's just offer them 130. No, don't ever do that. And a lot of people do it. I've seen it happen all the time. So make sure if it's take a hundred, do not go over that. There is another deal sitting out there that you can get it for that. Now, when I see that and I see that that property is gonna be a good property to put the money in, right? We're not overdoing the work. Sometimes when I see like I'm doing so much work and it takes so much time for a similar return that I can put somewhere else, I walk away. So do not just think about money, think about time. I've done some deals that have taken us closer to a year to finish, and I've made less money on them than deals that took us two, three months to finish. Honestly, one month to finish. Time plays a big role because that time can be invested in other deals that gives you more return. So once I do that, I make my offer, I get my inspection through. So if you're not a contractor or you do not know a good contractor, make sure you give yourself an inspection period because one time walking a house will never be enough for you to calculate everything, especially if you're not seasoned and you haven't done that so many times before. So always ask for some period of time where you can walk it with a contractor or two to have a bid. One thing that I see a lot of people miss as well is get the sewer line inspected. If you see the house that's old, it's been sitting there for a while, inspect the sewer. I think there's companies out there, uh Greater Pittsburgh Blooming or McVay, or even if you're in Pittsburgh and reach out to us, we'll camera there's a sewer for you. They do it for two or three hundred dollars, I'm not sure, but they will give you an exact report and send you a video of the sewer. It's 100% worth it. Do not go cheap on saving$200 or$300 to you know go ahead and spend tens of thousands of dollars, then to find out that there is a sewer issue that costs$20,000 that you did not factor in that will kill your deal and make you quit real estate. So it's worth spending the money getting the sewer checked. And then I would suggest too to pay attention to knob and tube and the house need rewire. So no cutting corners. Once you have a very clear scope of work and a good number, then you can feel confident that that deal does work. So if you have gotten value from this video, make sure you subscribe and you give us the like and just let me know in the comments if you have any questions or anything I can help you with with finding your next deal. And see you all on the next one.