How do you compare dissimilar deals?
Would you rather make $50k 70 miles away or $35k right around the corner?
Would you rather make $70k on a $200k project or $50k on a $135k project?
How about $60k in 4 months on a $250k investment or $75k in 7 months on $300k?
What if you could make $60k in profit on two light rehabs OR you could make $80 on a “pop top” rehab deal?
What if the property looks very profitable but is in a bad neighborhood?
What if the deal looks great but it’s 100 miles away?
What if you can make $150k, but the rehab will take more than a year and sales are slow there?
Investors face thousands of questions like these every day across America. Your answers to situations like these will depend in large part on the numbers, but not entirely on them. Sometimes an attractive set of numbers comes with a basically ugly house. Most big profits come from equally big rehabs. How do you “measure” market heat? How can we quantify the effect of distance on the project?
I tackled this problem years ago and developed a way to compare disparate properties. Today I am going to let you behind the curtain to see the logic and methods I used to create the Flipping America Property Grade and the Property Grade app. Some of you will say, “oh, ok, now I see what to do” and will go make your own analysis tool based on your own priorities. Some of you will say, “that’s interesting -- where can i just get the app?” But everyone will benefit from knowing the principles involved in quantifying the intangibles that allow you to compare everything with everything.
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Announcements:
- The Buyers Club is open for new members for a limited time. I have a new video on our YouTube channel about the Buyers Club. As long as that video is up, we are accepting new members. When we reach capacity we will take it back down. Just go to YouTube and search Flipping America. You will see we are posting content that is both useful and a little bit fun. While you are there please subscribe and hit the notification bell so you will know whenever we upload new content.
MIndset Moment:
News and Resources:
The Skip Tracing Programs reviewed by Jan Bancroft and her group:
Launch Control
Profit Drive
Skip Genie
REI Skip
PropStream
True People
Been Verified
Back Skip Tracing
REI Reply
Real Estate IQ on Demand
Not Tested: TLO, more for private investigators.
Questions from Listeners: Starr’s RILA Group
- I own my home but want to do a refi. Would you suggest me getting my own appraisal or using the one associated with the Bank that I am doing my refi with?
- I am going through the process of becoming a section 8 landlord. My property is listed at 1700 for a 3/2, but the program will only give me 1400 according to the zip code market value. Is there a way around this?
- I am curious...When doing a refi, why would a bank give a “No Appraisal Required” to the property owner?
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Motivational Quote: “It's through curiosity and looking at opportunities in new ways that we've always mapped our path.” Michael Dell With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu
