Accountant · Miami, FL · Member since 2020 · 89 posts · 57 votes
Every now and then, I would hear a real estate investor say how they came across a 100K home, but knew it was actually worth 80K, or, I would hear the opposite: an 80K home actually worth 100K.
How do these investors know that---just by looking at a property---they can guess/estimate the property's actual value? Or in more general terms, how do they know if a property is over- or under-valued? What factors do they look at?
If you pick an area you want to invest, you need to become an expert in that market. As an example, I invest in a handful of markets. The sweet spot for these investments are 3 bedroom 1 bath 1 story buildings. I know the market so well when a property is presented I know what the value is or could be with some rehab. This is how you beat your competition be better then them.
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
6y
What they know, and what they base their "quick"numbers on, is their knowledge of that "market"...specifically that range of properties in that market. When you know your market, you can be presented with a property anywhere in that market, and you can tell them what that property is worth, what it will rent for, what it needs to cost you in order to make a known profit, and cash flow.