Quick & Dirty Comping

The most fundamental skill we need as investors is the ability to find the value of a property. Whether we are interested in buying it as a rental or rehabbing it and selling it for a prophet, the value of a property has an far reaching affect on whether or not a deal is worthwhile. There is a big difference between the value and propose sale price of any given property, but that is beyond the scope of this article.

Today I'm going to give you a down and dirty way to get a property value with free resources that are available to everyone. I will be the first one to tell you that you can get far more accurate numbers by getting a comparative market analysis from a real estate broker or using other page services including prop Stream. But one of the first lessons my instructor instilled in me when I started wholesaling was that I need to learn to do deals with zero money. Once you can do that, you you've developed a skill that will put you far and beyond other other investors who piss away their savings to try to make a buck.

So let's get the ball rolling!

The Sources 

It's important to note that larger cities and there surrounding neighborhoods tend to work best for this approach. That's because properties located in very rural areas may not have enough data to allow these companies to create an accurate evaluation. But let's be real... We want to "invest where the people are", right?!

• Zillow
• Realtor.com
• Redfin

The Formula

The formula is simple. We're going to grab the valuations for our desired property from each of these sites and get the average, but we may not be using the information you initially think we are. The subject property that we're going to use for this example is 529 N Line Drive Hampstead, NC 28443. That's because it's a property that I purchased, prepped and listed for sale. 

As of the date of this post, the listing is still live. We've currently undergone one price drop and have had few showings/no offers. Let's check the valuation and see how the numbers are shaking out:

Zillow.com

People have beef with Zillow's Zestimates. No they're not as accurate as a Broker Price Opinion or CMA, but those are paid sources. So let's grab the zestimate and add it to our calculation:

$608,500

Realtor.com

This one is tricky, because Realtor.com got in bed with a Cash Offer company a while ago, so the usual property estimate tends to be flawed (in their favor, mind you 😉). But a quick trip down to the list of tabs below brings us to the RealEstimate!

Now, there are three numbers here, but the only one we're necessarily worried about is the CoreLogic. Why? Because CoreLogic is a market leader in real estate information/valuation. If you haven't ordered one of their property reports before, you're missing out. If I wan't a broker with access to Realtor Property Resource (RPR) I'd use CoreLogic all the time. 

One thing I noticed is that the last CoreLogic valuation took a straight up nose dive! Algorithm's aren't perfect, so I'm going to use the one from May ($629,000) but I'm also going to snag that $403,000 for giggles to see how the numbers shake out. Side note, this valuation may have something to do with what we purchased the property for... Shhh! 🤫

$629,000 / $403,000

Redfin

Until recently, Redfin didn't even have data for Greenville, NC so I didn't use it much, but now they do so they're officially a cool kid! We're going to use the Redfin Estimate for our calculation:

$612,033

Let's Get Mathing!

Alright, let's calculate this out!

( $608,500 + $629,000 + $612,003 ) / 3 = $616,501

To put this into perspective, we initially listed the property at $625,000, got 1 showing, dropped the price by $10,000 and started getting more traction! We're still not where we want to be (likely because the property isn't updated), so for giggles, let's take a look at where we'd be at if that $403,000 valuation legitimate:

( $608,500 + $403,000 + $612,003) / 3 = $541,167

It's nice to have that range, and luckily my numbers still work at that price, but I'm going to drop it for now. The number I feel like we're going to end at is $585,000.

Conclusion

After running my updated numbers, I confirmed that these numbers are in line. I ran a CMA and came up with ~$620,000. If I was to updated the kitchen and bathrooms while also painting the house it would likely have hit that mark, but rehabbing isn't my game. I'm a Wholesale, Wholetailer, & Broker by trade so I cleaned it up and listed it in current condition.

Now, this will vary by market but as you can see, then numbers were completely useable. If you have access to other paid resources like Propstream, RPR, or BatchLeads, averge those valuations in too! Just drop the lowest and highest number and average out the remaining ones. 

Remember to always lean on the conservative side when running your numbers! I actually used $610,000 as my ARV.

I hope this helps!