Foreclosure Comparables
How to find the after repaired market value of a property you want to flip, with or without foreclosures?
Hello. How do you find the after repaired market value of a property you want to flip….do you eliminate short sales and reo’s from your comparables and only look at standard sales that are in good condition? Or do you take into account short sales and reo’s in your comparable analysis?
Alan, there are a lot of things that are going to go into determining how much a house will be worth after you rehab it.
What is that market like? How many months of inventory are already listed for sale? What is the average home price? How does your home compare to the average?
Some of it depends on the kind of improvements you make as well. For example, granite counter tops instead of laminate, hardwood floors instead of carpeting are going to generate a higher sales price in the right market. Most do it yourself work looks like DYI work. Buyers recognize it. If you can’t do quality work on your own, hire it out.
Another factor is how motivated you are to sell it. You may want to sell quickly so that you can move on to another project. Most people make this happen by charging a bit less than they could if they were willing to wait and maximize the sales price.
If you are thinking about doing this sort of thing regularly, it would be good to partner up with a real estate agent. This would get you in on better buying opportunities, allow you to use their experience in making rehab decisions and get you help with a pricing strategy. Just make sure that you choose someone based on a real business decision and not because they are a friend of a friend.
Foreclosure sales in Real Estate Appraisals-Kent County
