Be Serious! Novice or Seasoned Investor Don't use Zillow for Comp

[Juan Rodriguez]

To briefly describe me I've loved Real Estate for a long time, I've had two rentals one was great an eventually became my first flip and the other a victim of the bubble. For a long time after that bad experience(I was 19-20 at the time) I was inactive and just trying to accumulate as much knowledge as possible to avoid failing again. I learned about wholesaling and took a chance to see how successful I could be to raise the funds to pursue buy and holds again. So a while back I was involved in deal that would have netted (after rehab costs) roughly $85k. (ARV $165K, Rehab $45k, Sale price $35k). I met an "out of town" investor that said he wanted to "expand into the Tampa Market" so that's when I got involved in a wholesale opportunity after I presented the whole package with a CMA prepared by a realtor using the MLS, with at least four different comps, pictures of subject property and surrounding comps/flips (sold) and of three others that were selling and or in escrow to the supposed investor that said he wanted to "expand", along with a detailed scope of work for the rehab and costs. Everything needed to make an informed decision. Said investor was excited and said "I want it as soon as possible". I said, "ok", and started my process as the wholesaler, got it under contract, I wasn't into it for much (only $1k) as I was trying to wholesale the property (make my $10k and be gone). But this is when it went south, not to mention I know due diligence is key and necessary. My issue is if you're going to attempt to be an "out of town" investor/buyer "attempting" to "expand". Be serious! Don't use comps from Zillow! They aren't accurate! Don't use bogus comps either. You should learn how comp properties accurately yourself. A frame bungalow built in 1928 can't be comped with a block home built in the 70's that is also crossing over a major road. That's a whole other neighborhood! It doesn't work that way! Needless to say I did lose out on that deal but I did learn that I need to vet people a lot better than just verbally. The reason for my post is both sides, both beginners like me and seasoned investors that still get cold feet and don't have the stones to pull the trigger in one of those situations. For anyone beginning this could be detrimental especially if their primary goal is raise the capital for their own deals. As most people live check to check this could be a major setback for them financially. Simply because you didn't know what you were doing while trying to scale up and got cold feet. For the novice's like me don't get so zealous in making a deal that you take peoples word at face value that you don't have an established relationship with because it can cost you a lot. If you've already made this mistake like I did, don't get discouraged. Keep working at it, God has a great way at aligning the right people for your success. BUT DON'T QUIT!!! Hope this helps anybody seasoned or novice!

[Crystal Smith]

Originally posted by @Juan Rodriguez:

So a while back I was involved in deal that would have netted (after rehab costs) roughly $85k. (ARV $165K, Rehab $45k, Sale price $35k). I met an "out of town" investor that said he wanted to "expand into the Tampa Market" so that's when I got involved in a wholesale opportunity My issue is if you're going to attempt to be an "out of town" investor/buyer "attempting" to "expand". Be serious! Don't use comps from Zillow!

 Some constructive criticism.  The issue isn't that the investor used Zillow for comps & it killed your deal or he got cold feet.  Based on the info in this post, the business mistake is you were marketing to one person;  relying on one person for the deal.  At the end of the day you're really in the marketing business & that's where you need to put your focus, so you're not reliant on one soft commitment.  If it's really a good deal & you have the right marketing in place, you'll have multiple offers to choose from.