Question for pro rehabbers - Posted by Adam (NY)

Real Estate Investing
#1

Posted by Matt on February 25, 2002 at 03:23:33:

Adam (NY),
You determine the FMV (fair market value) of a house by doing comps. have your realtor do them for you when you look at properties and have them available to you when you go to see any houses that you’re interested in. i have my realtor run comps on anything i invest even a drive by in so that i can also drive by the comps if/when i’m interested in the subject property. this saves alot of excess running around town later. the houses just around the one you’re looking at will not necessarily give you any idea what your property is worth. you need to look up sales of near identical properties in recent months in order to figure out it’s value. talk to your real estate agent and have him do the comps… he’ll know what you need. if you don’t feel you can trust him call another realtor and ask them to run them for you. keep in mind that cultivating a good relationship with your agent is worth it’s weight in gold.
hope this helps.

Matt Yohnk
MPD Investments Inc.
myohnk@mpd-investments.com

#2

Question for pro rehabbers - Posted by Adam (NY)

Posted by Adam (NY) on February 25, 2002 at 02:06:40:

My question is this: How do you determin the final value of a house BEFORE you rehab it??? Do you look at the houses around yours???

One last question for today: How do you determin the vale of the house BEFORE rehabbing it? Ive see a few formulas around but what is the most used formula for doing this.

I have AlOT of question in my head so I hope I dont offend people by asking them. I will be ordering Steve Cooks book very soon(I’ve seen it recommended a few times in the archives) which will clear up some of my questions. But until then…i’ll keep them comming.

Thanks

Adam

#3

Re: Question for pro rehabbers - Posted by Mark (WV)

Posted by Mark (WV) on February 25, 2002 at 08:24:20:

Adam,
Most Rehabbers will go with the 70% rule , price X70% less the cost to rehab = max offer. So if comps on other like kind houses are 100,000 and rehab cost would be 10k the most you would want to offer would be 60k.

That said , I go alot lower than that, I myself would go about 40-50%, and try to stay in a position that would allow me 2 exits on every house.If the house doesn’t sell or have the potenial to sell within 60 days I want to be able to rent it or L/O with a cash flow of at least 200 per month.

Hope that answers a few ? ,
Mark