How do I compare properties?

[Draven Stallings]

Hi, my name is Draven. I'm new to real estate and I have been looking at a few potential deals, what would be some good things to focus on when comparing comps? It seems there is a lot of information I don't understand, so for a beginner what should I focus on? Please help

[Kyle Renke]

Hey @Draven Stallings! From looking at your question, I assume you're asking about comparing "comps" or "comparable sales" in the area. If that's the case, essentially, there are two types of professionals that can help you when investigating and analyzing the comparable sales in an area -- real estate agents and appraisers. Real estate agents and appraisers have access to their local MLS (Multiple Listing Service) and can pull all the recent sales data for a particular area. This can be extremely helpful (especially if they're investor friendly) since they will likely be the one helping you purchase your investment property when you find it. When I'm working with a client, I will be sure to pull the 5 most recent active, pending, and sold listings similar to my target property -- this way I can accurately gauge the pricing of that home. Using the local market comps can help you determine the market value of a house to ensure that you're not paying over market value for the home. However, ideally you'd be finding a great deal that is much lower below market value.

The biggest thing at this point is to get practice analyzing tons of deals.  Using the Bigger Pockets Calculators are a great way to gain exposure and practice to analyzing deals, looking at your income vs. expenses.  The more repetitions you get early on, the easier it will be to recognize a great deal when it comes your way!