Analysis Paralysis
Help 
. I have a couple questions. How have you all gotten over the analysis paralysis? I am very new and am having problems trying to figure out what numbers do you run and what specific results do you look for in a good deal. My current sources are driving the neighborhoods, classified, and some investor websites. However, I have no idea what to look for in a good deal. Since I am starting out, I am looking for quick flips. And am using a buyers agent for some comps. The comps are causing me heartburn also. If there are no comps that match exactly the property that you are looking at, how do you know what numbers to use? Do I sound unsure yet? Thanks in advance for all of your good advice.
Comps are never exact unless you are in a tract in which all the houses are similar. What an appraiser does is add and subtract values. You can do the same thing yourself as soon as you have seen some recorded sales within the last six months. then just look at the property that was sold and look at the one you are interested in and on the fingers of one hand, that is five fingers, list one by one the plus and minus of the property. take away or add on and there it is a comp which gives you a pretty good idea of what your property will sell for. Ok, take your gloves off, and do it.
My its cold outside. Lucius
When I started out I went to every open house I could for a few months. I looked at a few hundred homes. With time you start to notice things and have different thoughts in your head.
This home is way overpriced
This home seems to be a good deal
This home probably would sell with an added garage and new carpet
etc
etc
You can start to get a grasp on your market a little more. Keep in mind that my target market is nearly my entire city of 60k people. If you live in a large city you may want to keep only to specific neighborhoods or subdivisions.
db103098,
check your messages, My partners and I are always looking for rehabs on the west side. We can discuss what I'm looking for etc.
Talk with you soon,
Jeff[ Edited by jeff12002 on Date 12/31/2003 ]
Here is one example. I found a house that they are asking $160K and it is 2650 sf. No other houses have sold recently for this size. But there have been several houses that have sold for 100 sf smaller in the range of $180K - $185K. I am waiting to get with my agent to see this listing. Would you assume that the home may sell for around $183K when all fixups are done. My mentor is telling me to try to look for houses that need less than $5K work. I have no idea on that matter because I am so very new to this.
Also, do you all use any particular software program to tell you what you may want to offer or other software to analyze a potential deal? How do you all crunch the numbers?
Quote:
On 2003-12-29 02:34, Lufos wrote:
Comps are never exact unless you are in a tract in which all the houses are similar. What an appraiser does is add and subtract values. You can do the same thing yourself as soon as you have seen some recorded sales within the last six months. then just look at the property that was sold and look at the one you are interested in and on the fingers of one hand, that is five fingers, list one by one the plus and minus of the property. take away or add on and there it is a comp which gives you a pretty good idea of what your property will sell for. Ok, take your gloves off, and do it.
My its cold outside. Lucius
Very true. Time spent learning your market is well worth it. Soon you will know a deal when you see one. This is true with repairs as well. One bit of advice is to make a few calls to local roofers, heating and cooling contractors, interior and exterior remodelers, etc. and become familiar with the general cost for these items. Also you could spend sometime in the local home improvemnt store pricing things like carpet, floor tile, doors, windows, kitchen furnishings, etc. Soon you will develop a general knowledge of costs to cure as well. Good luck and happy investing..
PS - most things are simpler than we allow them to be...
Quote:
On 2003-12-29 04:06, myfrogger wrote:
When I started out I went to every open house I could for a few months. I looked at a few hundred homes. With time you start to notice things and have different thoughts in your head.
This home is way overpriced
This home seems to be a good deal
This home probably would sell with an added garage and new carpet
etc
etc
You can start to get a grasp on your market a little more. Keep in mind that my target market is nearly my entire city of 60k people. If you live in a large city you may want to keep only to specific neighborhoods or subdivisions.