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Christopher,
Great question!
One of the first things a smart business-person learns is the value of the product / service they transact.If its a single-family house, we all have tools we use to ‘comp’ a property.
CFD members, please chime in with your favs.If you are new to that particular area, you can learn a lot from the recorders office. They are generally VERY helpful.
They keep ALL records of SOLD properties in that county. Learn to use that resource as part of your knowledge base.I’ve used title company records when I used to do a lot of transactions in one area.
A property profile gives a good overall view.
They are FREE from your favorite title co.Get to know the local title reps, they can be VERY helpful, and the information is FREE. What they want in return is for you to use their services for your title / closing / recording needs.
Some say realtors are a resource – but I’ve found them to be hit-or-miss. They have a different agenda.
No offense to any realtors on THIS space 🙂I’ve had VERY good experiences with an investor-friendly agent who would allow me MLS access. With their permission, of course.
Ask other investors (whom you trust) to help you QUICKLY comp a property. When I started, I took an experienced investor to lunch and learned what I needed to learn. We are still friends 25+ years later!
BTW, the learning NEVER stops!
One more thing, Jack was a MASTER negotiator.
But that’s another conversation for another day.Mike
Keep in mind that the 80% rule is not an absolute.
If the seller needs to be cashed out fast , you may need to get an option at 70%. The lower the better. Then you could do a highest bidder sale to sell really fast.
If the house is not in perfect condition, you will need to get a lower price. The worse the condition, the lower the price.
If the sellers will allow you to buy subject-to the mortgage then you may be able to pay more – but only if it is a fixed interest rate and low payments you can cash flow. Then you could keep as a rental or sell with a lease option or re-sell with seller financing that wraps the underlying loan.
If the seller is not ready to give you an option to buy below market but needs a quick solution, a master lease may be a better approach.
To determine estimated value, you can look on the county tax appraisal district website (ballpark) or go to realtor.com or zillow.com then type in the zip code to see what other homes or selling for ( also a good way to determine rents). If there are other houses for sale on the same street or subdivision, you can call to get the asking price.
I just came across a source I like allot http://www.icomps.com
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Don, I stumbled across another online appraisal estimating freebie service, atI found a note that back in 2009 they claimed to pull public records for 120 million homes
and combines those with other data to find an approximate value for a home. So they’ve been at this game for some time. How do you think they compare with iComps.com that you found?—Dee
Hello,
Another great App is called Homesnap. It allows you to view properties where they are connected to the MLS. It also allows you to snap a picture of a house and get the information about it. Great for driving for dollars. You can snap a picture of a house and it will save it so you can review it at your convenience. Homesnap.com Great utube about it too.
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