Comps and pricing

[dan332 0]

Hi,

I am hoping to get some input on comping and pricing CA deals. Between Craigslist and calling FSBO signs, there seems to be no shortage of interested sellers. However, it takes a good amount of time to look at the property ownership, look at it on Zillow, Realtor.com, and several other places, and sift through all this and develop fair rent and sale price numbers. I can really do only a few a day like this. I dont know all the neighborhoods well enough yet to make quick proposals without doing this.

 

Is this the way it should be done or is there a faster/easier way? Does anybody ask the homeowner to do some of this? I do ask them if they have an appraisal or comps, and most dont. Yet they still want their price, and I seem to be losing deals because I dont give them what they want. Michael, I know you advocate letting the homeowner fight the market themselves, but sometimes I feel like just playing realtor and giving them what they want and figuring I will take offers (havent done this yet because I dont want to waste time selling, but after losing several deals because we were apart on price.......it is tempting to take this "shortcut").

 

Also, what kind of premium can a RTO be priced at? It already has to be bumped up by the rent credits , but can it command even more (usually)? I usually start at slightly below "market", and add the rent credits and the O/C. Is this correct?

 

Maybe I should offer to pay a Realtor or an appraiser XXX out of the option money? I am finding I dont have time to make so many proposals and having 3rd party comps might help me close more deals. Just a thought.. worthwhile?

 

Dan

[Dan (SoCAl) 0]

Yet they still want their price, and I seem to be losing deals because I dont give them what they want. Michael, I know you advocate letting the homeowner fight the market themselves, but sometimes I feel like just playing realtor and giving them what they want and figuring I will take offers (havent done this yet because I dont want to waste time selling, but after losing several deals because we were apart on price.......it is tempting to take this "shortcut").

 

Hi Dan, you *must* resist the urge to go against the market; it simply doesn't pay off. It doesn't matter what the homeowner wants, make the offer based on what the market is doing. In most parts of the U.S, prices are still falling and most buyers are sitting on the fence, which means you need to be considerably under FMV to make an LP work. If you can't move your inventory you don't make a dime. Here in Southern California we have a ton of houses on the market at 30% below FMV — and they're not moving.

 

Dan

Freedom Creek LLC

[MichaelC 160]

Yet they still want their price, and I seem to be losing deals because I dont give them what they want.

Then you're not losing deals, Dan. Because those homeowners aren't going to move their property in this market if "they still want their price".

Michael, I know you advocate letting the homeowner fight the market themselves. . .

Uh, huh. And I still do. Believe me, the only thing more frustrating than not getting the deal, is getting it and then not being able to move it.

. . .but sometimes I feel like just playing realtor and giving them what they want

Dan, don't make me send some of the boys over to your house for an, uh, attitude adjustment.

Also, what kind of premium can a RTO be priced at? It already has to be bumped up by the rent credits , but can it command even more (usually)? I usually start at slightly below "market", and add the rent credits and the O/C. Is this correct?

That sounds about right. Keep in mind that in today's market the premium an RTO gets is less than when the market was more favorable for sellers.

Maybe I should offer to pay a Realtor or an appraiser XXX out of the option money?

That's it! Dan, Uncles Tony and Paulie are on their way. . .

[dan332 0]

Thank you naked investors for the "intervention".. I dont know what came over me.. must be all the rain every day down here.. my brain is getting soggy. I needed that kick in the pants to wake up.....

 

MC a homeowner told me y'day that he was ready to "reach through the phone and kick some ass" of some investor that lowballed him on his house a few days ago. Gotta respect the guy. If I do a deal with him, can I bring uncle Tony and Paulie walnuts with me for backup????

 

Dan

[MichaelC 160]

MC a homeowner told me y'day that he was ready to "reach through the phone and kick some ass" of some investor that lowballed him on his house a few days ago. . .

 

Dan