Run your Numbers

anybody with some Info on this Issue

don't base your decision on acquisition based strictly on internet sites. The information driven is only as good as the information it's pulling from (may or may not be current) it's a starting point (a first look). look but verify.

Your FMV/ARV should be based on concrete numbers. Sold MLS comparitables are your most accurate source.

list price is just that, it's an asking price. People are free to list at whatever the like.

thanks,
jen

To get the ARV, run the comps on the properties. (investor CASH comps, retail buyer comps, active & pending comps) You need to know how much a home will sell for, and what price to get the home at, for a cash buyer. You also will figure in your profit, holding costs, closing costs & realtor fees. There are several ways to get these numbers with different formulas.

Jennifer Grey has a great formula & perfect examples of her 1st deals, that I can't remember what post they were in the other day. I hope this help you somewhat.

When you get the MLS sold comps...Do you use a Average price of sold

If I remember right, you take 3 of the recent sold properties that match the property you run numbers. Add all 3 sold prices, divide by 3 and use that average amount. Add up the sqft. of all 3 properties, divide by 3 to get the average sqft. After that, Divivde the average price sold by the average sqft. to get average $ per sqft. Last, take that amount, multiply it by the sqft. of the property you want to by, and that is your FMV for your property. Once you have that number, you can calculate the rest.

An example would be:

Sold Comp 1 = $50k
Sold Comp 2 = $55k
Sold Comp 3 = $58k
* Total* = $163k

Total Sold Comps = $163k
Divide By = 3
Average Sold Comp = $54,333.33

Sold Comp 1 SqFt = 1,000
Sold Comp 2 Sqft = 1,250
Sold Comp 3 SqFt = 1,300
* Total * = 3,550

Total Sold Comps Sqft. = 3,550
- Divide By - = 3
Average Sold Comp Sqft. = 1,183

Average Sold Comp = $54,333.33
- Divided By Average SqFt. - = 1,183
Average price per SqFt = $45.93

House to purchase (SqFt.) = 1,150
* Multiply By Avg. price per Sqft. * = $45.93
Fair Market Value for property = $52,819.50

comparitables to be like in: bed/bd, sq footage, lot size, condition, year built, etc.

from list agents provides identify based on above criteria what are your comparitibles. comparing apples to apples

from each comparitable divide sold price by each units sq.ft to get price per square foot. (repeat for each)

ex: you may have 8 comparitables (I drop the highest and lowest and do a calulated average price per square foot)
so meaning from 8 dropping high and low leaves 6 comps. Add all the price per square feet to get a total. then divide by 6 (# of comps remaining) this will be your average price per sq' solds.

THEN multiple the average price per square foot sold by the number of square feet in your 'prospective' property to get your FMV.

hope that was clear.

Jen

sorry Dallas you were quicker on the draw lol

Thank you