All Forum Posts by: Randy M.

James,

When you are wanting to determine what a home is worth after it is repaired, you must compare that "subject property" to homes that are similar in terms of characteristics but that are fully remodeled.

Before we get into the comparison factors I think its important to note that all neighborhoods are unique in two respects.

#1 The Market Mix - The original builders could have varying floor plans, varying square footage's and varying stories however the overall neighborhood could also have varying home types such as Single Family Detached, Townhomes or some Multi-Family homes.

#2 Randomness - We can not control what neighborhoods homeowners/investors have decided to completely repair/renovate which means that all neighborhoods will have drastically varying degrees of condition especially as these neighborhoods get "older".

With that said here are the characteristics and data points you must "compare" in order properly analyze the ARV of a property.

In no particular order:

#1 Condition

#2 Bed

#3 Bath

#4 SqFt

#5 Lot SqFt

#6 Age/Year Built

#7 Relative Distance

#8 Relative Sold Date

#9 Property Type

#10 Stories

#11 Location - Near busy street/main road, power lines, canal, industrial buildings

So basically just find 3 properties that closely match your property that have already been "fixed up". Get the average of those 3 property and viola' - YOU HAVE THE "AFTER REPAIR VALUE".

I hope that helps.

* Tips 

- Don't let the age fool you of the "comps" some have been rehabbed.

- Try finding the "highest solds" first and checking their condition... Usually those are the fully fixed up houses.

- Try not to use Listings or Pending if you can... And if a Realtor sends you a jumbled mess of spreadsheets check to make sure they are "SOLDS" only as I have found that many Realtors are not very good at finding the Current Market Value let alone the After Repair Value.

Latoya,

What is the average median sales price for that county? Also are you going to get this property from the MLS or send out direct mail? Finally what percentage or discount are you seeking on the CMV or "as-is" value for your first rental?

Jonathan,

Its never to late to jump on in! Start by doing some market research. Here are some questions you need to have answers for.

#1 What is the median sales price for each zip code and the county as a whole?

#2 What zip codes have the most "cash transaction" and/or absentee owners?

#3 What type of properties do investors both on and off your buyers list buy?

Once you have this just market to those areas and JV in those areas.

When your analyzing a subject property for key values and metrics in order to make a sound investment decision, your going to need to start with the raw comparable sales data. Although an official CMA (comparative market analysis) from a licensed Realtor is the preferred method and source of evaluation, there are many free and paid websites online that allow investors to reference "comps" online.

I have a complied an on going and up to date list each year for my fellow investors. Keep in mind this list is as of January 2014 so they may change over time.

Once you've determined your values you can then use your formulas to make offers to sellers and prepare presentations for clients like private lenders and buyers. I wish I had a list like this when I got started in real estate investing years ago. 

Keep in mind these websites can have up to 70% of what sales are available on your local MLS (multiple listing service) so the more sources you utilize and compile, the better.

Here is the list:
https://www.redfin.com/what-is-my-home-worth

http://www.zillow.com/how-much-is-my-home-worth/

http://www.homegain.com/homevalues

http://www.*******************.com

http://www.homes.com/Home-Prices/

http://www.trulia.com/sell?sem=SellerLeads_Radius_...

http://www.propertyshark.com/mason/text/infopages/...

http://www.citi-data.com

http://www.ziprealty.com/home-value-estimates

http://www.eppraisal.com/

http://www.homesandland.com/Home-Values.html

http://www.remax.com/homevalues/search/

https://www.citimortgage.com/Mortgage/Home.do?page...

http://www.realestateabc.com/home-values/

http://www.pmz.com/homevalue/

http://www.realtor.com/homevalues?source=web

https://express.realquest.com/propertyvalue.aspx

http://realestatecenter.bankofamerica.com/tools/ma...

https://www.chase.com/mortgage/mortgage-resources/...

http://www.firstteam.com/homevalueestimate.aspx

I wish I had a list like this when I got started in real estate investing years ago. So I hope you find this helpful.

How would one decide that just because a SOLD property is 5 years new, that this is the reason it sold for any amount more/less? I'm only asking because there are hundreds of other factors and we would have no way of knowing why the buyer decided to pay more for the property. Not to mention a property built in 1948 could have been fully rehabbed in 2016. So again we can not infer that this is the factor that caused the eventual buyer to pay more/less for the property. Same with a pool. Some people love the idea and yet others maybe scared their children would be at risk.

Best regards,

Randy

Hey guys,

My company used to struggle with analysis quite a bit. So much so it forced me to create our own in-house solution. Now our company utilizes proprietary software that allows us to analyze comparable sales data we get offline or from title/MLS in seconds. To respect the TOS of the forum you can PM me if you want to know about it.

Basically I noticed I go through the same "daunting" process on each deal (even the ones I don't buy) and I got so burnt on that quickly. So I sat down, wrote an algorithm and software with an engineer and now the tool runs so smoothly we have a VA overseas do the reports on every deal in-house.

This is helpful for our acquisitions team because the homeowners are always appreciative that we did our "homework" before we called them.

Now we don't chance down Realtors and call our sellers back 3 days later. We literally can make an offer live on the call if comps come in offline or within an hour when our Realtor uploads comps into the system.

Good bye analysis paralysis!

Again I'm not all about promotion on BP forums so If you want to know more just PM me.

Randy

Contact a realtor with access to the MLS.

Have them pull cash transactions for all zip codes.

When you get the data, tally up where most investors are buying.

Keep in mind some of the data will be owner occupants so you may want to do a separate report on non-owner occupied.

Once you understand this find out what the average sales price is for your county and target the zip code with less than 120% of this number for your mailings and marketing (online/offline).

I hope this helps.

Randy

Kelly,

Instead of a book, just jump right in.

Contact a realtor with access to the MLS.

Have them pull cash transactions for all zip codes.

When you get the data, tally up where most investors are buying.

Keep in mind some of the data will be owner occupants so you may want to do a separate report on non-owner occupied.

Once you understand this find out what the average sales price is for your county and target the zip code with less than 120% of this number for your mailings and marketing (online/offline).

I hope this helps.

Randy

Hello @Jill DeWit, thanks for the warm welcome. Say I come across land deals often and I'd be happy to send you these deals so we can JV on them.

Here is our property website: Property Inventory Website

Best regards,

Randy - The REI Rockstar

My name is Randy Matthew and I'm an investor in the Phoenix, AZ market.

I'm the CEO of Randy Helps Homeowners, LLC a real estate investment firm that provides deeply discounted properties to investors around the country and internationally.

I'm also a real estate investing coach and software developer.

You can read more about me and my real estate solutions at my websites below.

Rock on,

Randy - The REI Rockstar

http://www.thereirockstar.com