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Author Topic: Comps and after repair value  (Read 1215 times)

Offline jacobb

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Comps and after repair value
« on: April 06, 2007, 11:56:36 pm »
I am looking at buying a house it is on the MLS listings and have a question.  I am new to investing and understand most everything except for comps and after repair value.

The house I am looking at is priced at 258,000 the comps show that  the median house value in the area is 257,000.   The MLS listing states that the it has about 80k worth of repairs and after repair value  is about 400k.   

This doesn't add up for me.  if the comps say 257K and the selling price is 258K.  how can you come to the conclusion that it is worth 400K after repairs?  The only thing that I can think of is that the zoning for this property is Multi-family. 

if it was multi-family would that drive the value up that far?  is there anything else that would drive it up that much?

If someone could shed some light on this I would be grateful. Thanks

Offline propertymanager

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Re: Comps and after repair value
« Reply #1 on: April 07, 2007, 06:12:28 am »
Jacobb,

You have already come to the correct conclusion.  A house's value is based on the market, not the repairs that someone has put into it.  If it were worth $400k, why are they selling it for $258K on the MLS?  It's probably worth very close to $257,000 at retail.

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

 




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