Realtors & comps for off market deals?

[Zach Hoereth]

I was scrolling my Instagram feed this afternoon and came across something quite funny. It was a picture that read, "No Realtor Worth Their Salt Is Going To Be Your Comp Money!" This was posted by an active wholesaler in my market, @RyanDossey.  It caught me at the right time as I have been interacting with a number of investors who have contacted me as a realtor requesting comps for off market deals. 

I chuckled a bit when seeing this post because I have noticed investors who are looking at off market deals are often needing comps or verification of information from the wholesaler they are working with. Unfortunately, the Indianapolis market has become saturated with wholesalers who are attempting to move properties "off market" for prices that one would typically see listed on the MLS. For investors who are out of state or unfamiliar with the market this poses a number of issues. How will I justify the numbers that the wholesaler is sending me? How can I validate the property values around the subject outside of just using zillow? As Ryan put it, "No investor worth their salt is using zillow to pull comps."

Ultimately what an investor wants when a prospective deal hits their desk is the ability to analyze with efficiency and accuracy. Information suddenly becomes a delicacy in helping decipher whether or not the subject property could be a great opportunity. This is where it can be beneficial in having a relationship with a realtor in which a predetermined structure has been established to benefit both parties when observing deals that are considered to be off market. 

 As an investor and broker myself I could not agree more with what Ryan has to say not only in the post, but the article attached to it. He later explains in the article the benefits of having a license and how one can leverage it to his/her advantage when investing. Personally, I can say that having my license has helped me grow as investor in helping others find great properties. At the end of the day this business is a learning experience which means we do not have to reinvent the wheel. Learn from other people's mistakes and treat people right! 

// How are some of you certifying figures and information from wholesalers in which you have never worked with before or do not have a reputation? \\

P.S. There is this crazy concept of people being compensated for their time and effort, so make it worthwhile!(Realtors consistently pulling comps for investors) 

Cheers,

Zach  

[Ric Ernst]

@Zach Hoereth I certainly agree that many wholesalers are "listing" properties at market value rather than a price point that would be attractive to any savvy investor. I'm sure they're getting away with this as there seems to be a frenzy of coastal investors (I am one of those BTW) who see properties relatively cheap and don't realize they may be anywhere from $10k - $50k overpriced. Personally, I have a great relationship with my REA and do task him to vet my properties. I ALWAYS make sure he gets paid. When he works his tail off selling me an inexpensive MLS property (which he really doesn't make much money off of) I follow with a thank you card containing a bonus check in the mail the following week. I've bought from wholesalers and off-market private parties and, as you mentioned, used my REA to run comps for me and even shoot some videos and then hired him to write the deals and shepherd them through title and closing rather than handling than myself. A good agent is a crucial part of your team. You may not need one for every transaction, but I suggest involving your important team member in all of your transactions and compensating them rather than cutting them out when you feel you can go around them. At least send a nice gift card to St Elmo's to show your appreciation.