Are you ready to move your business in 4 weeks? This is part four of that series and we are discussing how to run your business virtually!Tune in and find out!
[00:01:30] So if you're listening for the first time, or if you're a longtime listener, I want you to know, and I'm saying this sincerely, I want you to know that I thank you. I'm appreciative. I am forever grateful that you are allowing me into your life with the short timeframe that we are together on this podcast or on YouTube.
00:03:31] Not only could you get. Really killer comps, but you also, they have a bunch of different lists services in there. So you can build out your probate list, your tax lien list and your vacant lists. And you're not on a rock. So it's not just for comps, even though that's what it was built for. It also has a lot of other ad-ons that is really important in your real estate investing business.
00:04:12] And that's an important factor too, because sometimes you can buy these properties, not add a lot of value, like you're not going to go in and do a full-blown renovation. You might. Be able to pick up this property with relatively good equity piece and just clean it out and put it back in the market. We call that a whole tale and listed and sell it and make a quick 30, $40,000 without doing anything.
[00:10:18] All right. I have 2,600 square feet and everybody else is about 26 to 28. So that means they did some sort of a redesign in the house. The guys I'm buying it from, maybe they opened it up and they took some of the bedrooms and combine them to make a bigger bedroom. So this is what you have to start thinking about.
[00:13:40] If you're talking about a $75,000 differential, I wouldn't even think about it. I'd renovate the property, turn it over, flip it and put the money in my pocket. So running comps sum this whole thing up, it's part art and it's part science, the sciences. When you're running, it is different thresholds. You want to measure against the science is knowing that you're comparing apples to apples, same neighborhoods, same style homes, same school districts, same similar square footage, similar style homes.
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Talk to you all soon!
Welcome to unstoppable real estate investing wealth. My name is Billy Alvaro, AKA the unstoppable BA former billion-dollar mortgage banker gone bankrupt turn professional real estate fester where each week you'll learn the tools, strategies, systems, and secrets myself. And other a highly successful real estate investing entrepreneurs used to start, grow and scale their businesses, creating massive profits and how you can too.
[00:00:31] And we'll teach you how to put those profits to work. So you no longer have to get ready to finally experience financial freedom and generational wealth. Now let's get started. Welcome back to another episode of unstoppable REI wealth. I am the unstoppable BA coming from the shadows. You can't really see me because of the way this thing is positioned, but I am in Puerto Rico.
[00:00:54] If you're watching on YouTube, you see the sunny background I've been living here for a month. Absolutely loving the Puerto Rican lifestyle. I'm definitely going to be moving here within the next two to three years. It's been in my mind for the last four that I'm going to be moving abroad.
[00:01:08] And Puerto Rico is going to be a spot for many reasons, not just for the weather, but if we keep it the way it is, because there's very good tax benefits to to making the move here. Anyway, if you don't know me, and this is your first time listening, I want to start with saying thank you. Thank you because I know that everybody's getting hit with a ton, a shit ton of marketing and ads to listen here and watch this and YouTube.
[00:01:30] So if you're listening for the first time, or if you're a longtime listener, I want you to know, and I'm saying this sincerely, I want you to know that I thank you. I'm appreciative. I am forever grateful that you are allowing me into your life with the short timeframe that we are together on this podcast or on YouTube.
[00:01:47] So thank you for that very much. Again, this is a different type of podcast because I'm not doing my interview being that I am in Puerto Rico for a month. So I'm shooting some solo casts by myself, just trying to add some value. And as I was thinking my girlfriend, Nicole is inside and she has locked up.
[00:02:02] Now we're virtual. And we've been here now for a while and she's locked up five deals over the course of the last couple of weeks virtually. In Puerto Rico from in New Jersey is the market. And so all these properties that we're picking up in New Jersey, we're going to be ultimately renovating. So I want to go into today, how to go about running your comps , your comparables, to ensure that you're actually getting a good deal.
[00:02:26] What do we do? How do we run the comms and what systems do we use? Should we not have the MLS? So when New York. Where we are, we have full-blown MLS access. And I think that's the ultimate strategy. If you have access to the MLS, that's what you want to utilize, because that's where most of the data is. You also want to be able to, if you're doing deals at a state, or if you just don't have access to the MLS, you have to tap in to assist them.
[00:02:49] That's going to give you accurate comps and data. So. One of the systems that we utilize, especially for ad estate deals is called prop stream. Now on Billy secrets.com. You could go down to that link. It's called list-building and air V comms all in one run comps and get leads without the MLS. If you click on that, it takes you over the prop stream.
[00:03:09] There is a, if you use my link, there's a special gift that you have, and there's a discount code and also the crap. But let me take you through. How to run comps. I'm going to talk specifics, but not using the MLS. Just how we run them in any state. Let me give you the guidelines. Then remember if you're new to this, or if you need access, use prop stream, go to Billy secrets, you could utilize that link and leverage that system.
[00:03:31] Not only could you get. Really killer comps, but you also, they have a bunch of different lists services in there. So you can build out your probate list, your tax lien list and your vacant lists. And you're not on a rock. So it's not just for comps, even though that's what it was built for. It also has a lot of other ad-ons that is really important in your real estate investing business.
[00:03:51] So comps in general. How do we run them? What do we look for? So the first thing we want to do is you want to compare apples to apples and you want to look for after repair value comps, so you could figure out what this is, this property going to be worth once they add value to it. And the other thing we look at is what's it actually worth today in its current condition?
[00:04:12] And that's an important factor too, because sometimes you can buy these properties, not add a lot of value, like you're not going to go in and do a full-blown renovation. You might. Be able to pick up this property with relatively good equity piece and just clean it out and put it back in the market. We call that a whole tale and listed and sell it and make a quick 30, $40,000 without doing anything.
[00:04:33] So it's important when you're running your comps, your ARV after repair value, you fix it up and what it's actually worth today in its current condition, apples to apples. If you're buying and picking up a ranch or a colonial or a Cape or a split. You want to comp it to that similar style house, unless there's Al there's always these nuances, right?
[00:04:52] Unless you're going to be doing a scrape and build meaning you're going to be knocking houses down, or you're going to be adding on a second story. Right? So if you're buying a ranch and you look at the comps in the area and other comps is selling for X dollars and you like, damn, if I renovate this property, I'm not going to make that much because there's no real value.
[00:05:10] However, If I add a second story and square footage, the colonials in this area, they're trading for 175 or 275, whatever the number is greater than a ranch. So now that you have your ARV, then you could back in your repair costs to see if this is going to be a deal that you should add value in a second story, or completely knock the house down.
[00:05:28] So again, I know I'm talking fast, apples to apples first phase, and you want to look for same school district. So you have to be aware, you can cross over one street. And being a different school district and that value in the other street could literally be a 10, 15 or 20% increase or decrease in values.
[00:05:50] What's important. You compare similar school districts, similar types of houses. And then of course, bedrooms and bats. I always try to put the same bedrooms in, I never put bats in for this reason. We can always squeeze in additional bathrooms. Right. We did that in a couple of properties out here in Jersey recently, they were all three ones.
[00:06:08] We turn them all to three, two, as we edit value. So you want to compare the house to similar type house, similar square footage, same school district is a must the same school district similar bedrooms, right? And then from there you have to start looking at what are some of the things that may drive down the value.
[00:06:26] And then what are some of the things that may drive up the value? So let's talk about driving down the value. So what could that be? That could be. On a main road, double yellow. So if you're in on a double yellow and all your comps are inside a neighborhood, they're going to trade sell at a higher value than that property on the double yellow.
[00:06:44] Why? Because. It's a busy road. It's going to take longer to sell. So you're going to have to put your whole time on your quick off a deal analyzer three to four months longer. And you're going to have to put anywhere from five to 10% as a lower area. Now these are our numbers. There's no hard and fast.
[00:07:00] You have to see what's going to work in your area, but general rule of thumb. If you're buying them double yellow, it's going to sell less than the same exact property inside the neighborhood. If you are next to or across the street from a gas station. If you have high tension wires above your house, if you have a property that the backyard is 10 foot deep, and everybody else in the area has a nice, 80-foot backyard, it's going to decrease the selling value of that property.
[00:07:26] What else if you have a school across the street, some people think that's a positive. Some people could think it's a negative. It's always busy cars coming in and out. If you have an airport right next to you or across the street, a train tracks across the street or behind you, these are all negative selling features where you'll find an ask for the seat, but it's going to take longer on your whole time.
[00:07:48] And the house probably will sell for less than it's in a regular neighborhood. So that's the hard and fast on the negative areas. Now what's some of the positives. If your house has a built-in pool, could add some value. If your house has, double the acreage of all the houses in the area, it's not going to be doubled the value, but it's going to add a bump on the value.
[00:08:08] If you have a larger lot, if your house, if all the comps in your area are in good condition, nothing renovated, and you're going to be topping line renovated. There's going to be a bump for that as well. Right? And there's other things that, that are going to take away and add to them. Just giving you a general rule of thumb when you're running your comps.
[00:08:25] And then what you want to do is you want to go in. And if you're in a market that's hot, you want to go back and you want to look at the last six months of properties that sold. That's the first piece, six months that's sold in the last six. And you want to go if you're an appraiser, if you're selling a property, they're going to go within a mile.
[00:08:45] I never do that. I never wrote my comps a mile out. I go within the same, try to be within the same neighborhood. And if I can't be with an innate same neighborhood, I try to block it off. With main roads. So if I have a main road to the East main road to the West, North and South, I stay within that facility.
[00:09:01] It might be, slightly bit different neighborhood, but I'm within that vicinity, that block and they make sure again, that it's within the same school district. And so I look at the last six and then I start drilling down. Okay. What sold, what did it look like? Do I have any comps that even sold?
[00:09:17] So the first thing I look at is I'll put my ranch in four bedrooms and I pull it up and I'm like, crap, I have no comps now, what do you do now? You have to start loosening up. So the first thing I loosened is my square footage. When I do square footage, I generally do a variance. I look for between 10 and 15% and I'll go as high as 20, but not normally of the square footage.
[00:09:38] If I have a 2000 square foot ranch, I'm looking to sell, I'll go up to as maybe I should say, 10 to 15%, 22 to 2300 square foot. Down to about 1700 square foot. So anything in between there that's my heart. My heart stopped at a look at if I don't pull anything, if no comps come up, the first thing I do is I open up my square footage.
[00:09:59] I might take it off altogether. If still no comps pop up. I might take off the bedrooms, the see, and I'll start looking. Holy shit. Okay. All the ranches in this area. They're all five bedrooms and I have a three. All right. Now I still thinking I have a three what's the square footage comparable to these other properties in the area.
[00:10:18] All right. I have 2,600 square feet and everybody else is about 26 to 28. So that means they did some sort of a redesign in the house. The guys I'm buying it from, maybe they opened it up and they took some of the bedrooms and combine them to make a bigger bedroom. So this is what you have to start thinking about.
[00:10:35] If you're going to compare apples to apples and all the houses is selling at five-bedroom, three baths, and they're getting four 10, four 24 40. And your bedroom, your house is a three-bedroom, same square footage. You wanted them to have in your head. Okay. Without me adding square footage, I could do a redesign on the inside to add value, to capitalize and get the value that I need in this property.
[00:10:55] When I resell it. When you're looking at your loosening up your criteria, you're going to loosen up first your square footage. You're going to lose up your bedrooms and baths. And if you can't find any properties, then you have to say, okay, I have a, a. Ranch and I'm looking at, and there's no ranches had sold in six months.
[00:11:13] Let me open it up to 12 months. And then if you still see there's only one or two comps that sold in that in the 12 months, what did they sell for? If there's still none, then you want to say, okay, what the hell? What the hell sold in this area? Take off the property type and see what's sold. And from there you're going to start seeing, you might be in an area where every property was at once a Cape or, a ranch, and they converted it over into a colonial or into a two story.
[00:11:41] And so now, the plan, this deal, if you're getting it at the right number is not to keep it as a ranch and remodel. It's most likely to add value by adding square footage going up or going back. And redeveloping that property to his highest use. And that's where you figure out how many square feet it's going to take to add on.
[00:11:59] And then you have to dial in your construction costs today. I don't want to go into how to figure out construction. They really just want to talk about figuring out your overall ARV. Right? So I was speaking about a lot. I'm going through a lot of shit. I'm going through quickly go back and relisten to this podcast, but.
[00:12:14] Apples to apples S really important square footage, the square footage, bedrooms, the bedrooms same school district. You're you want to have your decrease of five to 10% off the value. If you have one of those anomalies, it's really tiny backyard. The railroad station, all this other crap. Then when you're looking at your comps, you see your after-repair value.
[00:12:33] The next thing you want to do is say, okay. What are the houses trading for in this area? And it's as is, so you might be buying a property that it has, it just needs a facelift it's in decent condition, but it just needs a facelift. What are they currently selling for in that area, in that market? If they're selling, I'm going to use numbers on deals.
[00:12:52] We just did. If they're selling you that area for $300,000 and you're able to pick this property up at. 245 and do nothing. And you have your own cash. It might make sense to go in and just take it down and relist it and put it right back in the market and make a quick 20, 25 grand. It might make sense if you're going to make 20 to 25 grand doing that, then rehabbing it and making 40 grand.
[00:13:19] It might not. You have to determine what's right for you. We've purchased properties where if we renovated it, we would make 40 grand. And if we bought it, cleaned it out and put it back in the market, we'd make 30 quick. I always opt to make the quick dollar because money today is worth a whole hell of a lot more than money tomorrow, especially if there's only a small differential.
[00:13:40] If you're talking about a $75,000 differential, I wouldn't even think about it. I'd renovate the property, turn it over, flip it and put the money in my pocket. So running comps sum this whole thing up, it's part art and it's part science, the sciences. When you're running, it is different thresholds. You want to measure against the science is knowing that you're comparing apples to apples, same neighborhoods, same style homes, same school districts, same similar square footage, similar style homes.
[00:14:08] The art comes in once you're looking at it to see, okay, is this going to be a completely new build? You're scraping it. New builds. We all know, get a higher trade value, higher ARV resell value than a remodeled home. They can get a five or a 10% or 15%, a higher bump than you would if you just remodeling.
[00:14:26] So what I'm saying is the art and the science of doing these AOVs is there, but there are rules go back relisten to this podcast. And now if you. If you are trying to use a system like there's free systems out there, Zillow, for instance. Right? So Zillow is decent. It's not the best, but it's decent to pull comps to shit.
[00:14:46] Thing about it is there's a lot of comps on there that just aren't on there. They just, they're not on Zillow at all. And they, a lot of times don't have the square footage. And a lot of times that you can't start. Looking at styles of homes compared to styles of home. You can't break it out that way. So it's a little bit more of a pain in the ass.
[00:15:01] If you're in an area that you don't have MLS, I highly recommend prop stream. We use it nationally when we're investing in different areas. It's a simple tool to use. If you go to Billy secrets.com, if you scroll down, it's called a list-building air V coms all in one. It's running comps and also building out a list, right?
[00:15:19] So that service, you could build out a list comps when you're rehabbing is one of the most important of the two factors you want to know and dial in what your after-repair value is. That's one of the specific variables, the numbers that you need in order to determine what you're going to buy. And then of course the other one is your rehab costs, which I'm not going to go into that one today, but now if you're wholesaling.
[00:15:41] Also it's a different animal. You don't have to go through and do it. Everything. I just said, if you're going to go in and start wholesaling properties, why? Because wholesaling is really just. Meeting the needs of the seller and coming up with the absolute lowest number you can buy it at or get it in the contract with, and then turn it over to see if in fact you're going to have somebody who's willing to buy it at a greater number than what you're in contract for.
[00:16:06] So if you're brand new to this business, and you're like, my God is no way I could do comps and I can't handle this and it's too much work for me. And I don't understand how to do this analysis. Don't stress. If you are starting off with wholesaling, it really isn't that important to dial everything in. You can get a general idea.
[00:16:22] Just by going on to the MLS or prop stream or Zillow and figuring out what the ARV was for two or three properties that sold in the after-repair value and use that average as you number. If you have three of them that a three 43, 83 60 divide, add those up divide by three, might be $365,000. Is your overall average.
[00:16:46] You then figure out what number it's going to take to get that guy in the contract. If he's saying I'll sell it to you for one 80, lock it up for one 80. Call up those people who you saw that went into contract and sold properties and sold them for the 340, 360, 380, if it was other, renovators call them up, go on the public records, even better to see what they bought or for if they bought the properties that at one 90 or 200, and you'll lock into up at one 80, you have an automatic $20,000 spread.
[00:17:12] And so the science is completely different. If you're going to wholesale verse, if you're going to renovate, if you're going to renovate. Your ass is on the line. You're taking a financial risk. You're borrowing private money. You have real costs and overhead. You want to dial your shit in. And if you're buying from a wholesaler, you want to dial your shit in.
[00:17:30] But if you're wholesaling the property, it's a little bit easier for you because the renovator the guy who was buying is really going to tell you if you're on or off your numbers and the people in the area, because it's all public records. The other guys who flip properties and bought in that area.
[00:17:44] If you have a seller that's calling you to sell. All you need to do is look online, public records and see what these other guys that do what I do bought it for and just buy it for less than that and sell it over to them and make your five, 10, 15, $20,000. So I spoke a lot. Speaking about the air . Tell you guys had to figure it out.
[00:18:03] The tools you want to utilize MOS is the absolute best by far. If you, have it, use it prop stream second to none paid service. It's a few bucks a month. You can go to Billy secrets.com start utilizing private stream it's on there. I labeled it as a. List-building air becomes all in one. I'm gonna put props stream on that too.
[00:18:22] Just you see it. It is a very awesome tool. And then of course the free service, which is not the best, but if you have no money and you're not a hundred percent serious about this business, and you're not investing in yourself or in your game, then Zillow is is, decent as well. And this that's it, man.
[00:18:37] So run your numbers the right way makes you happen. I'm enjoying life. I'm going to go for dipping that fricking pool back there. Cause it's calling. My name I'm sweating. I have a couple of days left. In sunny, Puerto Rico. And as much as I love it here, I'm looking forward to getting back, check things out and get back into my lifestyle in New Jersey.
[00:18:56] Peace out. I'll see you on the next one. Thank you so much for listening to today's episode of unstoppable real estate investing wealth. My mission. Is to give you my listeners, the blueprint for success inside the secrets for starting to grow and scaling your real estate investing business. You could experience and live unstoppable lifestyle.
[00:19:17] I've made it simple for you to catapult yourself to success. Go to Billy's secrets dot com@billyssecrets.com. There you will find every single tool tip trick strategy system and sprit. You used to make millions of dollars as a real estate. Everything my team uses and my guest views all in one place for you to tap into, you can start, grow and scale real estate investing business.
[00:19:48] I really hope you implement what you're learning. I hope utilized tools, tips, tricks, strategies, and secrets. And I hope to see you on the next God. Bless bye-bye.