You probably noticed a while back I added a tool to the right side of my blog called “Speakpipe”. I even wrote a blog post about this a while back that you can read here. This is a great tooland and a great way to get your questions answered learn real estate investing.
For some reason, folks are still a little shy about using it. I'm not sure why since it's only talking and god knows most of us are really good at talking. Every week I get questions from folks in my email, but not so many from Speakpipe.
However a couple of weeks ago I did have two brave souls that left me a question; Vivian and Aisha.
Here is Aisha's Question
Aisha is asking about how to determine the value of a property. She is getting a ton of probate calls, and she is confused about comps and analysis.
Aisha it's pretty common to struggle with this in the beginning, but you are really lucky you have access to the MLS. I do look back at the sales history of the property but it's mostly just because I am curious. It doesn't affect the comps.
When comping a property, you should only go back one year and only include houses within a one mile radius of your property.
This will give you a good idea of what the home values are in that particular neighborhood. There will always be a comp or two that are higher than the rest. I like to call these “hopes and dreams”. When folks are putting their numbers together a a lot of investors (especially ones that are new) have a tendency to “hope and dream” they will get top dollar for their property and they might. But in reality, you can't count on this. Stick with the ARV that is is the median number; the one most of the houses are selling for.
You should always compare like properties; ranch style homes only to other ranch style homes two story homes with other two story homes etc. You can't compare a two story to a ranch style home or a tri-level.
One more tip; look at any really low numbers. Those will most likely be home purchased by investors in your area.
Use conservative comps and figure your repairs a little on the high side and you will always come out OK.
Here is Vivian's Question
Vivian is asking about a couple of books that were mentioned in the Mitch Stephen's video. Vivian; I don't actually know that answer but I will go back and listen to the video and see if I can figure that out for you.
My thanks to both Vivian and Aisha for submitting their questions.
Do you have a question? Speak up and leave me a message in Speakpipe. All you have to do is talk.
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