Analyzing Comps - How do you do this
Analyzing Comps
I have been pulling comps of free internet sites [ domania, etc] & I know they are not 100% accurate but what if they were. What are the analyzing standards you all use when pulling comps?
Example: Say you have a 1500 ft Brick Veneer home with 6/3/2 [6 total rooms, 3 bedrooms, 2 baths] & a 2 car carport.
You find 15 comps in the neighborhood, some have 8/4/2 , some 7/3/2, & others 6/3/2. The homes are made of brick, wood, aluminum, vinyl, etc. Some prices are extremely low because rehabbers purchased them[$20,000]. Others are around $90,000.
How do i determine which houses to use in the comp & not to use? Is there a certain # of homes i should use?[ie the top five] Do they have to be in teh same subdivision?
How do I figure out what the 1500 sqft home will sell for?
And after I determine a price, how do I justify it when a rehabber I attempt to flip it to says “ I pulled comps & found 3 homes sold for $20,000- how do I know mine wont sell for 20k?”
I intend to flip to investors and need to know as much as possible about this topic to present the advantage of the deal in the most professional manner.
Also, if you rehab how would you like a deal presented to you?
Please help me.
Hey verbatim, welcome aboard
The basis for analyzing the comps, (if I understand your Q) is "(within a 1/2 mi. radius) you take the three properties most resembling the one you're interested in.
Take the total sq footage of all three, find the sum there, then find the selling price of those houses, divide the total selling price by the total sq footage.
This gives you the price per sq. ft. , then multiply the price per sq. ft with total sq. footage of the house you're interested in..this will give you the avg. price of yours.
As far as finding rehabbers, just place an ad in the investors section of your local paper.
Hope this helps,
Clif