All Forum Posts by: Alex Huang

Appreciate the response.

My OP wasn't meant to come off as dejected as it sounded, but moreso to try and get others thoughts on my conclusions. The MLS seems like it is a pretty poor resource for finding deals outside of finding those rare gems. I know there are variations from market-to-market, but I wanted to see if others echo the similar opinion to ensure that I'm not doing something wrong as I continue to look for opportunities.

I've been diligently looking for properties for both flip and buy & hold purposes over the last several months. I'd be curious to hear people's thoughts on my following conclusions:

Sites like Zillow, RedFin, Realtor are terrible resources for finding great deals. These sites are the equivalent to the picked-over Black Friday sale items. The only opportunity for finding good deals is by the off-chance you find a 'unicorn' property where you are able to buy significantly below list price (eg a $100k property that the seller is willing to actually sell for $50k or less) - a property that a buyer would have no indication at this price except through communication. Otherwise, all of the good / favorable listed properties have already been snatched up by investors who have relationships with wholesalers or agents.

The real opportunities, as mentioned above, are acquired through wholesale, private seller, direct marketing, or agent relationships. The MLS is too slow and efficient that finding deals are nearly impossible, unless you are in a market with no competition.

Thoughts?

I've been playing around with comps but I'm struggling a bit on how to account for the stylistic differences of a home (or whether that matters). Here's an example:

Subject house is a foreclosure listed at $86k. 4 Bed / 1 Bath. Given its square footage, I thought it would be a good candidate to conver to a 3/2, so I started trying to find comps that were 3/2 within a few streets that sold within the last 90 days. My comps sheet is below, which was inspired by J Scott's file he shared here at BP.

So here is my problem. The subject house is stylistically different than the comp houses I was able to find (subject house is all siding, comp houses were all brick ranch). The subject house is similar in design and layout to many other houses on its same street, but those are all 2/1, 3/1, or 4/1 properties, none of them have recent sales, and the highest Zestimate on any of those homes is $85k (and I know Zestimate is largely useless).

My comp analysis suggests that the ARV of a 3/2 would be in the neighborhood of $115k.

So, a question to all the flippers, how would you account or adjust your ARV calculations for this? I would expect that the comp properties have much more curb appeal than the subject property despite the square footage and metrics being similar-to-equal on paper. Is it foolish to assume that just because the house matches on paper, that it could fetch a price tag that is (conservatively) $20-$25k more than anything else on the street and in that style?

I know there is no perfect answer, but I would be curious to hear how experienced flippers account for these sort of factors and adjust their analysis.

Could definitely provide some input if you give a little more information on what you're looking for?

I've always preferred to use my local bank for business purposes, but there are logistical issues depending on your circumstance. For instance, I had a business partner who was on the other side of the country, so that presented its own issues. 

Generally speaking, I've found local banks to offer better service than the large ones.

I'm looking for a better understanding or strategy with regards to the 'blue dots' ('Potential Listings') on Zillow searches.

Oftentimes they indicate pre-foreclosure properties, but they aren't yet available on the market. 

Is there any viable strategy or information you can utilize through these blue dots or are they largely meaningless when it comes to finding potential properties, etc?

Certainly a possibility and market-dependent.

I'm speaking mostly from the position of being inexperienced. My benchmark numbers might be unattainable, but I can adjust accordingly if I find something that seems reasonable.

 I can't speak to the rental market, but I had many friends (myself included) that lived in the Avondale / Norwood area and it is definitely C/D. 

Excited to be making my first offer on a SFH (intention is to buy & hold). I'd appreciate any feedback that ya'll can offer on my analysis.

Property is in a A- area. House is listed at $65k. Median comparables in the area (similar bed/bath and sq ft) have sold around $76k. This house lacks an attached garage, so I assume that it dings the value a little bit. So let's say ARV is $70,000 if the house were all dressed up and live-in ready.

House certainly needs work on it. Its carpet has all been removed and the kitchen needs rehab as well. The bathrooms are outdated but usable for the purpose of renting and there are some things that have already been quoted (electric work + some concrete) that the listing agent has quoted at $3.1k in repairs.

So for rehab I have the following estimates:

Kitchen (cabinets, countertop, etc): $6.5k

Floor (1,500 sq ft): $5k

Appliances: $3.5k

Paint Interior: $2.5k

Electric/Concrete: $3.1k

Miscellaneous (fixtures, etc) $3.5k

Rehab total: $24,100

Safety Net (+10%): $26,510

ARV less Rehab: ~$43,400

 x 70%

= $30,380 offer price

Keeping in mind that I am using ultra conservative numbers, do the rehabs and estimates seem ok or too far-fetched? The property should easily rent for $900-$1100 in the area and I am not afraid to start out with a near 'insulting' low-ball offer just to feel out the seller. 

Given the above info, what would you recommend to be the 'highest' price you'd be willing to go to (keeping in-mind my rehab estimates might be off the mark).

Thanks!

@Michael Guzik if it were me, I would take the necessary steps required to get your RE license and do that first. 

College will always be an available option if things don't work out for RE. IMO you're better off trying RE out and if you hate it, you can always go the more conventional route and get a degree. If you opt to try college first, you might hate it as well, but in that instance, you've already dug yourself a financial hole due to loans.

The opportunity cost of trying RE first is a few years in your early 20s. The opportunity cost of trying college first is a potential mistake costing you tens of thousands of dollars.

Good luck.