OfflineSo I've read here so many differences in making sure your comps are in line or else!
I'm hoping to get some advice here from the seasoned investors with this, please!
Well i have a FSBO selling SFR for 60k 3bd/2ba 1920 sqft,I did the comps with my realtor (great guy, he invests some himself) He didn't find anything that sold for the past year in 1/4 mile from property, so he widend the search to 3miles-5 mile radius wich includes some new developements of new homes but still the same sqft and area. So I had to use those comps. Here are the figuers:
I plan to Buy and Sell (AS IS)
Comps: 150,000 (my wholesaler investor says it's high for the area)
Selling Price: 60k
Contractor Repairs:(I talked with the contrator at length and this was his estimate) 24,000.00 Includes 4,000 for flat roof, replace:doors,molding,light fixtures,cabinets,vanities in kitchen and baths,paint inside,paint outside. (wholesaler says this is low as well on repairs)
a day later I checked the home value search sites plus my Prop Trend and found the values had dropped 7-8k. So I'm having my realtor tripple check Comps just to make sure. Locking it up for 30 days gives me time to find another investor interested in the deal. The investor/wholesaler said he buys at 60-70% ARV.
Trying like Heck to get my first deal done!
--Kathy from the Sun City
"Cut not the wings of your dreams,
for they are the heartbeat and the freedom of your soul." ~ Flavia
Kathy Wholesales TX
KM WholeSale Properties LLC
469-587-9967
1888-591-1096
Keep up the good work.
Always Looking to Acquire Houses | Always Looking to Amaze Investors
Should I worry that the comps aren't a quarter mile away from the property and that nothing has sold (on MLS) in a year in at least 1 mile away? All homes that sold are in the new areas about 3-5 miles away, so I had to use these for my comps even though the property I'm interested in was built in 1993 and needs 24,000 in repairs. Why is my investor saying he buys at 60-70% off ARV. Seems like he may not think this is a good deal for him.?
"Cut not the wings of your dreams,
for they are the heartbeat and the freedom of your soul." ~ Flavia
Kathy Wholesales TX
KM WholeSale Properties LLC
469-587-9967
1888-591-1096
You mean your investor wants to buy at 60-70% of the ARV right? i.e. he'll pay 60-70k for a property with ARV 100k.
That's pretty reasonable in today's market, as the investor will have to take into account the commissions, closing costs, seller's concessions, discount etc when he sells in the future. Plus he wants to make some profits
Anyway, just present the property with whatever comps you have to your investors. And if they think it's a good estimate, then you're good to go. Of course they will double check the numbers themselves.
Actually, even if you discount the comps to 100k, you can still sell it to your investor for 70k and make 10k profit. Good luck with your first deal!
Real Estate Investor, if you would like the chance to work with me in the US East Coast, send me a PM (Private Message) anytime to see if we are a good fit for each other.
Wishing you abundance,
Ken Siew
The worst thing you can do is over estimate ARV and under estimate repairs.
Most investors that I have on my buyer's list wholesale 80% of their deals. Aha, maybe thats what he is trying to tell me, "sell to him for lower" I offered to sell at 115,000. So I should start low and hope that he buys from me often, I got it! Thanks for that, always good to get another perspective.
I'll PM
"Cut not the wings of your dreams,
for they are the heartbeat and the freedom of your soul." ~ Flavia
Kathy Wholesales TX
KM WholeSale Properties LLC
469-587-9967
1888-591-1096
Yes my point exactly and my question, How do you avoid that?
thanks,
"Cut not the wings of your dreams,
for they are the heartbeat and the freedom of your soul." ~ Flavia
Kathy Wholesales TX
KM WholeSale Properties LLC
469-587-9967
1888-591-1096
You plan to sell as is...sell to a fix/flipper or a buy/holder? You could use the income valuation approach (based on rent) which might yield a lower yet more conservative value. This would factor in the level of rehab...rent ready vs total rehab. Get some bids from more contractors to see what is realistic for repairs. You can also get a copy of the Bluebook Home Repair Guide (http://www.bluebook.net/products/cost-guide-realtor/) to see how in line the contractors are.
Kathy,
is the owner currently living in the property or is it vacant? How old is this property? You cannot use a new home as a comp!
I would follow what Greg Murphy does- just take the ugly out of the property! (take out junk, take out old carpet, take out anything broken, clean with bleach); leave a clean slate for investor to buy as is, and just add in your fee to the price.
Wishing you success,
Valerie
Valerie
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Kathy,
Try posting an ad on Craigslist for it and see what type of interest you get. At those comps you should have some takers.
Hope this helps,
Dave