Rental Property Investor · Dallas, TX · Member since 2012 · 502 posts · 263 votes
I am trying to comp a potential direct mail lead in East Dallas and am having trouble analyzing the comps. There are plenty of comps for houses that are perfectly livable but very dated, ranging from ~$60-65 per square foot. However, I'm having trouble getting any consensus on past solds that have been rehabbed.
There are only 3-4 past solds that have been rehabbed (going back one year) and they range anywhere from $80-$125 per square foot with apparently no rhyme or reason. They all seem to have about the same level of rehab and are on nearby streets. I have driven the neighborhood and they seem to be good comparables (similar age, size, features, etc.)
What do you do in this situation? Take the very conservative end of the range?
There are only 3-4 past solds that have been rehabbed (going back one year) and they range anywhere from $80-$125 per square foot with apparently no rhyme or reason.
Welcome to today's market. One thing to check is were these all financed deals or were some cash deals. If the financed deals were higher that may help explain the variance.
Without some justification why the comps vary so much, the only safe approach is to be conservative. Good luck - Ned
Andrew Herrig in addition to what others have said, in my area the following can cause ranges in the SF price of homes. A single level home will be more per SF than home with a basement if same size, as a home goes up in SF the price per SF drops (inverse relationship), different sides of a major street but only 4 blocks away can be a large difference and so on. I agree that your range of $80 to $125 is huge, but see if there some local or specific home types that could cause this. Look very close to the rehab. If one had new roof, windows, HVAC and the other did not, that could affect sale price even though the "rehabs" were the same.