Philadelphia, PA · Member since 2013 · 31 posts · 3 votes
I'm currently looking at a property that (according to the state's property assessment site) is market value is $105,000. I think it's a vacant/abandoned house b/c the 1st flr windows are boarded it up. I've gotten the sellers phone number and current address from yp dot com and am about to ask her if she's interested in selling. She paid $43,900 in 1990 for the house. I think it may need appx @12,000 in repairs. Is there a general formula to figure out what is the most I should ask from my end buyer to pay for this property if I hope to make a profit of appx $3-5k? Or should I be looking for more or other information to factor in to make this potential deal work? I need some insight please. Thanks
The best comps will come from the MLS, so finding a great real estate agent (or getting your license yourself) will go a long way towards helping you determine an accurate ARV.
Zillow can provide accurate sold data, but is often 1-3 months out of date (it can take 30-90 days for deeds to be recorded and data to be available to Zillow and similar sites/services).
Who is your end-buyer? A rehabber? A landlord? A homeowner?
Each of them will have their own set of requirements for evaluating a deal, and you need to know who the buyer (at least type of buyer) is likely to be to determine how you evaluate the deal.
If you're selling to a rehabber, a general rule of thumb is that a rehabber will be willing to pay about 70% of the rehabbed resale value minus rehab costs. If you subtract your fee from that, that's what you can likely pay.
That said, keep in mind that the resale value isn't the same as the assessed value. You determine resale value by looking at comps.
Thank you for this info it's very helpful. I've used zillow, eappraisal, and realquest and haven't found any of them to be helpful. Since the property is literally right around the corner from me, what I've done is put in my address and zip in the remax listings search to see what houses are going for in this area. Do you think that will help me at all; or should I try and get info on what houses actually sold for in my area in the last 90 days or so? And if the latter is better, is there any resource available to me that I can access myself or will I need a re agent?
Shirley,
In my experience zillow can give you a general estimate of value. I have found zillow most reliable for comparing rental markets in Dallas and not producing a good ARV. The best thing I tell you to do is to get MLS accesses or have a Realtor run some sold comps for you for the last six months. I would tell them not to pull a radius of any distance but to stay with in any major roads or major cut through street. If at all possible to stay with in the same subdivision. Also to make sure you are comparing apples to apples.
The best comps will come from the MLS, so finding a great real estate agent (or getting your license yourself) will go a long way towards helping you determine an accurate ARV.
Zillow can provide accurate sold data, but is often 1-3 months out of date (it can take 30-90 days for deeds to be recorded and data to be available to Zillow and similar sites/services).