Running comps

Bird Dogs, Wholesaling
1

Can someone tell me what sense to make out of this table of comparables that my realtor sent me?

If I had to pick one number to make it the FMV or ARV, what would it be?

http://mfr.propertykey.com/imapp/viewer/032aac676d6dc95ec34f87d3b1fb4798

I know how to read English, but getting comparables is not as easy as you are making it out to be.

Notice the difference between the $50,300 based on value ratio and the $93,000 based on square footage.

Which one is it?

2

There’s no such thing as an exact figure.

Comps reflect a range of values.

The key is that you buy at the bottom range of values, less the costs of repairs.

Generally speaking, the larger the house, the cheaper the sqft cost.

Also, you have to figure in the value of the lot. Larger lots command more money as a rule.

I noticed that the first “comp” sold for $18k in February of this year. You should find out if this was a beater-fixer, or an inter-family transfer, etc. It makes a difference to know.

If the competition is in here at $18K on $60k houses, that indicates very strongly where you need to be on a similar rehab project and/or wholesale flips (perhaps less than that, if there was any wholesaling fees included in that price).

BTW, it takes the same number of dollars to rehab your average $60k deal, as it does a $160k beater. Just saying.

To be safe, I would assume my offers have to be under $60k, less repairs/costs/fees/profits.

That’s all I can offer.

3

Thanks.

I think what I need to do is get to know my buyers better.

Depending on what they would do, the ARV would be different.

4

How did I do running these comps?

I noticed that the buyers I talk to run them very quickly, so it can’t be as hard as it seems.

The property in question is 5841 Beechmont Blvd. Orlando, FL 32808. 3/2 1139 sq. ft. listed at $90,000.

I found…

  1. 5214 Grandview Drive 3/2 1223 $67,000 3/18/16.
  2. 5503 Lejeune Drive 3/2 1364 $83,000 11/24/16.
  3. 5900 Paradise Lane 3/2 1092 $82,000 2/25/16.
  4. 3714 Westwood Road 3/2 1139 $58,000 1/28/16.
  5. 3766 Powers Ridge Court 3/2 1218 $95,000 1/5/16.
  6. 5927 Forest Grove Blvd 3/2 1214 $63,000 11/25/15.
  7. 5918 Paradise Lane 3/2 875 $62,500 2/22/16.
  8. 5617 Lejeune Drive 3/2 1276 $115,000 1/21/16.
  9. 3520 Forestdale Drive 3/2 1123 $65,000 11/24/15.
  10. 3417 Ridgemont Road 3/2 1232 $110,000 4/22/16.
  11. 5503 Lejeune Drive 3/2 1364 $83,000 11/24/15.
  12. 3412 Londonberry Blvd. 3/3 1404 $105,000 4/6/16.
  13. 3746 Yosemite Drive 3/2 1500 $82_000 12/2/15.
  14. 6408 Shallow Hill Drive 3/2 1216 $135,000 4/22/16.
  15. 6412 Shallow Hill Drive 3/2 1500 $95,000 4/11/16.

Of these, there are several higher priced that sold just last month… (#10, 12, and 14).

Also, #1 sold in March for $67,000.

The most similar in terms of square footage is #4, which sold for $58,000 in January.

After careful analysis, I have no idea if this house is fairly priced or not.

How would you use this information to make a decision on this homes value?

What would your estimate of ARV be, or do you need more information?

As I see it now, there are two skills holding me back from being a millionaire in three years:

  1. Accurately running comps
  2. Being a competent home inspector (but this is rapidly improving with the few houses I’ve seen. A month ago, I couldn’t even tell you what a bad roof looked like and I thought “bad roof,” meant the framing as opposed to the shingles).