All Forum Posts by: Jason Malabute

As far as age, I have been using a multiplier if it is more than a 10-15 year difference. I usually can find houses that are built in the same timeframe, so rarely do I run numbers adjusting for age.

as far as condition, all of the houses I flip are considered a C2 for property condition rating. A C1 is brand new. C2 is renovated (being very basic here), C3 being cared for but not renovated. C4 is cared for but with some deferred maintenance. C5 is with a bit of deferred maintenance, and C6 is in poor condition. I'm not sure how universal these codes are, however I do my best to find renovated comps. If I don't, I like to make sure the comps are C3 condition. This is where there will be a buffer of sorts. If you have two similar houses one a C2 fully renovated and a C3 in very nice original shape and the price is the same... the renovated house should sell first.

Just as an FYI, this system is something I have been using since moving to NY. Back in CT where I did my flips, I actually never really did ARV comps (if you can believe it). I grew up in town and honestly had a good feel for what houses would sell for. I would confirm a sale or two in that range in the area, be a little conservative and make my offer based on that. My new market people seem to be paying significantly more for distressed houses, which has led me to come up with an ARV system I am comfortable with. Just wanted to be transparent with it.

Here's a rough example:

If you look at the difference between the improved and unimproved properties then you can determine that improvements are are roughly worth $58/sqft 

(148+140)/2-(89+83)/2 = $58/sqft

that you can go back and add to your CMA to determine your ARV.

Hey @Jason Malabute hope you're not getting swept up in the fires going on in Sunland.  

To answer your original question, what you're looking for is the value of amenities in a particular neighborhood. The best way to find those values is either to ask a local knowledgable realtor, or to extract them by doing a comparative analysis on like properties with one that doesn't have that particular feature, and the same way that you wold do a CMA.

@Jason Malabute I described above, the calculation I have seen used for lot size is $3000/acre. A 1 acre lot would be $3000 less ARV than a 2 acre, etc.

In my area improvements are listed on the Assessors site, giving the SF size.

@Jason Malabute I am in a new market, however when i bought my current house, I got a copy of the appraisal. The values he used up/down almost mirrored my last market (central CT), so I simply used what I "knew".

As far as a patio, if my house didn't have one, but a comparable house had a 200 SF one, then I would adjust by 200 SF x $10/SF or $2000. It is not by any means that this is exact, however it helps me get an idea, as well as gets me solid comparables for the day an actual appraisal happens.

Regarding living verse total SF, I feel weird saying this, but what do you mean total SF? If a house is a 1000 SF ranch with a full unfinished basement, I compare it as a 1000 SF house. If it has a 500 SF section of the basement finished, I treat that area as the appraisers did, which was a reduced $/SF amount. What other SF would be included in the total?

@Jason Malabute this is all part of the "art" of running comps and getting your ARV. Lately I have been treating them like an appraisal. I have a few appraisals in my folders and use the adjustments they used. $30/SF for main living space. $10/SF for decks/patios and basement living space. $3000/acre. I don't know that this is the best way, however I have seen it compared with realtor CMAs and my numbers are usually right where those come in. I do my best to get houses in the same area, similar style, similar age, and if possible only use renovated houses. If there is anything that's tough to adjust (exact location) i am just conservative.

@Jason Malabute this is all part of the "art" of running comps and getting your ARV. Lately I have been treating them like an appraisal. I have a few appraisals in my folders and use the adjustments they used. $30/SF for main living space. $10/SF for decks/patios and basement living space. $3000/acre. I don't know that this is the best way, however I have seen it compared with realtor CMAs and my numbers are usually right where those come in. I do my best to get houses in the same area, similar style, similar age, and if possible only use renovated houses. If there is anything that's tough to adjust (exact location) i am just conservative.

@Scott R. thanks for the article. I agree that accurately calculating adjustments is a judgment call based on the individual market, and that's why I think I need to get a whole lot of practice and experience to become good at it. 

@Joe Homs thanks for the feedback. Yes, the listing price seemed a little too good to be true but then it's a short sale so depends on what the bank is willing to accept. The agent told me that the short sale was accepted by the bank and went into a binding contract with some buyer (although she didn't sound 100% sure) so no more showings. I'll have to find a vacant home like you say to crunch some real numbers..

@Jason Malabute I applaud you for not letting your disability hinder your goals!  Just remember everyone has strengths and weaknesses, capitalize on your strengths.  I used to hate presenting in college; I'm an introvert and much rather not have everyone's eyes on me while I'm talking.  One day though, I had a break through: familiarizing myself with the material I was presenting to a point where I knew the subject thoroughly.  Every time I presented, I aimed to be the authority on the subject so that I didn't stumble over my own words and no questions would catch me off guard.  It got to the point where I actually enjoyed giving presentations!  Think this could be key for you.  I believe if you study and practice cold calling (with people you know), you will be able to overcome your speech impediment because you become comfortable with the subject and how you run your business.  

Wishing you all the best!  Please keep us posted regarding your progress.  I'm inspired by your determination to go after your goals and am sure others in this community will be just as inspired and find themselves cheering for you from their computers.