In real estate investing, your earnings are determined by how you purchase the property. Not so much how much you sell it for. Running comparables is a key component to your success. You need to know the value of the repaired property as well as the properties sale price compared to the subject property in the current market. In today’s market, compensation is handled a little differently than it was in 2005-2006. Don’t even waste your money or time hiring an appraiser.
Some of the free websites you can use are sites like Zillow, Trulia, and you can also check your tax assessor’s site. Now these websites are free so they are not the most accurate. However, they will provide a range close to current property value, as well as homes sold in the area. Realquest is one of the best sites to use when running comps on a property. It is a monthly fee that you have to pay. But you can access information about the neighborhood, schools, crime rate, etc. It is by far one of the best websites to use that is quite accurate.
The best resource to use to run comparables would be MLS. Now, of course, only real estate agents have access to the MLS. But if you relate to one and build a relationship with them. They might agree to give you an assistant login. So you can also access the data in MLS. As a real estate investor, it is imperative for me that you have access to MLS. You can still change a deal without it. But it is very useful!
When comparing a property, always be sure to take note of square footage, bedrooms, and bathrooms. If you sell wholesale, all if not most of it will be sold to investors for cash. Therefore, you need to find out what price properties near the area of interest are selling for. Don’t go comparing apples to oranges now. Instead, compare that 1,400-square-foot 3-bedroom, 2-bath home to a similar home recently sold for cash. Look at the properties that were sold in the last 3 to 6 months at most. Once you feel comfortable, you also found some good properties to compare. I would say bid as low as 10-15k for what comparable properties have been sold for. Unless the property needs a complete rehab, you’ll want to offer less.