OfflineHow does everyone here caculate comps?...i dont know what is going on but my comps keep comming in lower than what the properties are selling for.
here is how im caculating them
Final sale price divided into the sq ft which gives you a price per sq ft then you add all the others together and divide it out by how many homes which gives you an average sq ft sale...then you would multiply that into the sq footage of the home your looking at?....but i do understand somethings make them sale easier than others such as pools, garages, etc...
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to subtract repair costs and your profit?
Shirley
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It is what it is 'til you change it.
It's the ARV (derived frm at least 3 area sold comps)--property value after repairs MINUS the PRICE, MINUS REPAIRS (nec. improvements from contractor bids/your estimation).
Example:
$125,000 ARV (prop'ty can be marketed/resold for after repairs)
-70,000 PRICE (CA$H purchase)
-20,000 REPAIRS (repairs to suit exit strategy)
-5,000 FEE (typically 5% of deal)
-------
$30,000 EST. PROFIT
BUYER's Out of Pocket =$95,000 + CLOSING COSTS
Typically, investor buyers look for 50-75% discount off a list price.
As a property wholesaler, you are the negotiator!
Know end buyer's exit strategy: Fix n' Flip, Fix n' Rent, Buy n' Hold?
The bigger the spread, the better the deal...Leaves enough 'meat on the bone'!
PS. When you reduce the ARV by 20-35% (low-high end) that will reveal guesstimated repairs OR Take the difference between the ARV and the Original price = Actual Cost of Repairs
Happy Prospering! ~Kat, Liberty Residential Investment Acquisitions
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• "Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy!" ~Dale Carnegie
• "Begin, be bold, and venture to be wise." ~Horace
• "Never, never, never give up." ~Winston Churchill
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PS. the 5% fee would really = $3500 on my example above (it's late)
For sold comps try to find similar properties, similar beds/baths, etc.
Go for recently sold (6 mos.) then go back. Try to stay in same division or subdivision, within a mile then expand out/go back 9-12 mos. if necessary.
PPS. Check the DG Forum section, somewhere there's a whole blog on COMPS.
I believe Michael explained it well...
Happy Prospering! ~Kat, Liberty Residential Investment Acquisitions
• "To every thing there is a season, & a time to every purpose..." ~Ecclesiastes 3:1-8
• "Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy!" ~Dale Carnegie
• "Begin, be bold, and venture to be wise." ~Horace
• "Never, never, never give up." ~Winston Churchill
• "Whatever you do, or dream you can, begin it. Boldness has genius and power and magic in it." ~Johann Wolfgang von Goethe