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Flipping Houses: “How Do I Best Learn My Market?”

“Everything doesn’t have to turn out exactly how you planned in order for you to call it a success.”
- Neale Donald Walsch

Here’s a question I received yesterday:

“Maestro, how do I best learn my market?  I’ve read information about this and understand this is important,
however, I have yet to have anyone explain this to me step-by-step.”

Great question!  I’m not sure there is a step-by-step answer, but here are some things you can do.

1. Partner with a relator
This should be done regardless.  Realtors are a wealth of knowledge about the local housing market.  And,
they can also provide access to the MLS, which is a huge advantage for a wholesaler.

A great trick is to look up a property on zillow.com.  Once you click on it, it will list several realtors that
work that area of the city, including contact information.  Don’t be scared to call them up.  Explain that you’re
looking at buying a house in the area and wanted to know if they can provide some insight.

Once you know the average price per square foot of an area or neighborhood, then you’re good for a bit.
The housing market is constantly in flux, so don’t rest on that number for too long.  But, it should hold firm
for a bit.  Then, you can say, “The south side is going for $100/sq ft.  The north side is $50/sq ft.”  And on
and on and on…

2. Flip some houses
Nothing takes you farther than actual experience.  Even
if you end up losing the deal because you fudged up the
numbers.  At least now you know and can move forward
with future deals confident in your knowledge of that area.

3. Pull comps
Go on zillow, or trulia, or FreedomSoft, or the MLS or
whatever and start typing in addresses in specific areas
that you think are ripe for flipping.  Drive around the city
and find the lower income areas.  Chances are you already
know these areas, unless you’re new to the city.

When you pull the comps, you can see what they sold for.
The wholesale flips will be roughly half, or a fraction, of the
retail sales.  So, if you pull 3 comps and two of them sold
around $100k, with one at $60k, all within three streets of
each other, you pretty much know what the ARV is, the
avg p/sq ft and what wholesale deals are selling for.

Now get out there and flip something!

Maestro
Founder and Coach of the most personal, hands-on and 1-on-1
wholesale and REO coaching program on the planet!
Wholesale Coaching, Inc.  <– the solution

p.s.
This is the absolute perfect time to get into wholesaling.  The
market has shifted.  We’re seeing double-digit gains in home
value, and because of this, it’s now a seller’s market again!
This is just like it was during the housing boom… when we
were flipping houses for $50k in profit… per flip!

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Posted under: Flipping Houses

2 Responses

  1. Sherita Cotten says:

    How reliable is Zillow, Trulia and Eppraisal?

  2. admin says:

    Not very reliable, Sherita. But, if you consider all of them, instead of just one, you will get a “gut” feeling. For example, it may look like this:
    Zillow zestimate: $75,000
    Trulia estimate: $70,000
    Eppraisal value: $68,000
    homes.com value: $72,000
    realtor.com value: $34,000

    From this, I can surmise with some confidence that the ARV is basically $70k. However, if you were just using realtor.com, you may think the ARV is $34k. Get it? This is not an exact science. But, it works more often than not.

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