FMV

Bird Dogs, Wholesaling
1

I over heard someone saying to find FMV you can do Sqft x location? What does this mean?

Thanks

2

FMV= Fair market value
Usually determined by evaluating comparable SOLD properties. two important attributes when evaluating are, size(sq.ft), location* and style of home among other things but these three are quite important.
I hope that helps.

Desmond
Kamere Realty Group

3

I am dealing with Luxury homes. Some of the comparable’s are way different then the houses that I’m looking at. Some of the comparable’s where at 4000sqft, where mine is at 10,000sqft. So I how do I figure this out?

Thanks for your advice.

4

I don’t think that is a very reliable method. A house that is identical to the subject house can have a huge price difference. A comparable house built forty years ago more likely costed less to build per square feet then a similar house today. Construction costs haven’t gone down and the price per labor hasn’t gone down. That is why the comparable sales method is much more reliable. My house was built in 1957. There is no way I could buy my home today for the price it sold for in 57.

5

How do I determine FMV of a luxury home? These homes are custom. There is not a lot of comparable prices to these. :help

thanks

6

I have had abundant experience with flipping very expensive homes. In our current market, you will need to invest in appraisal work with one who is certified and approved by a lender. Otherwise, it would be difficult to get a true retail value.

Unless you have very deep pockets, I would consider setting aside any greed and consider doing smaller deals that are safer in this market or perhaps comperable priced deals in the multifamily properties where you can have a more calculating risk.

Over the past 3 years, many of my colleagues who were investing in high end homes lost way too much due to our economy. I am investing in small deals or cheaper cost per units in multifamily deals.

Invest Safe.

Rob
R.E. Investor/Mentor

7

This is a great question.

Fair market value USED TO be cut and dry. Pull comparable homes in the area that have sold within the past 6 months…

Not so much any more though…If your planning to wholesale you need to base your fair market value on a couple of things

  1. comps that have sold in the past 2 months…

  2. Then look at existing inventory and expired listings to analyze what a competitive price will be.

If a home next door DID NOT sell for 120k and yours is similar then you would have to assume that yours could sell for around 110k…Or at least that is the price that you would want to find evidence to back…Even though previously a home sold for 140k it might only be worth 80k now so don’t get tangled up in old numbers.