54% ROI on a flip & the importance of running comps properly

[Philip Williams]

Hey all just wanted to share a success story for those people saying there are no deals to be found! This property was a foreclosure up for sale at a judicial auction. I have an assistant who runs comps for me on all the judicial sales, figures out the ARV calls and gets the minimums from law firms etc.... On this particular property she was having a hard time running comps. The property in question was a ranch on 3 acres in a small town about half an hour from where we normally invest. To make a long story short it was unique in that nothing remotely close to that type of property had sold in years. Also this small town had not gone online so nothing could be found about sq footage layouts anything. We check all of the major sites algorithms zillow realtor redfin were all over the place anywhere from 70k to 120k. I calculated it at 160k! I knew with such a difference between what the perceived worth and the actual worth there was money to be made. I showed up the date of the auction knowing the minimum bid was 45k and I could comfortably go up to 70k. Lo and Behold no one else bid although others were there bidding on other properties. I firmly believe no one was able to correctly run the comps which kept them from purchasing this gem. Final numbers below!

purchase price 45k
rehab cost 45k
sale price 155k
closing costs 16k
roi 54.4

DOM 5 

total profit 49k