90421 valuation with the cma

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Welcome toPlanetSavers University Teleclass #1Today we will look at a “Real Deal”And analyze it thru the eyes of the

CMA or Comparative Market AnalysisThis form should be provided to you by your Realtor. Dont leave home

without it. The following slide showed up in my email. Let’s take a look.

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Does this add value for a wholesale transaction?

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This is the text I sent back to the Realtor.

It is always the questionYou need to ask.

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Text

These are the two listings on Winery

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This means you can buy a property and agree

to fix it without paying before the close of escrow

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Contractor’s Bid to get theproperty to Ground Zero = Ready to start Renovation

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The Other Address on Winery from the CMA

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Boarded Up = NiceNotice square footage. Is it the conversion?

Pool - liability & money pit

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Bad CompsToo far away and too old,2-1, & 3-1’s aren’t comps

Cyberhomes is usually better than this!

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More Bad Free CompsToo far away

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Conclusion: The Free sites sometimes Have valuable info, but not as good as a

Well selected CMA from the MLS

Get a good Realtor for your team

Or Become One.

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Let’s make an offer.

Back to the CMA

The CMA is the best singleStarting Place to Start.

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24Median is skewed by the REO’s Use These +$10

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Observations:Separate the REO’s

From the “normal houses”The last two are similar

Our Renovation willMake it worth $10-20K more.

This will be our ARV

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ARV = After Repaired ValueThis is the common term used

By InvestorsNext we want to calculate

MAO = Maximum Allowable Offer

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Basic FormulaMAO = ARV * .70 - Renovation

Safer FormulaMAO = ARV * .65 - Renovation

These are MAXIMUMsOffer less, do the counter dance,

Then negotiate again.

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ARV = $130,000*.70 = 91,000

Fire repair = -10,400Renovation = - 40,000

MAO = 40,600

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RememberUsing .65 instead of .70 is a safer

formula for beginners.

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Another Method1. Start with ARV = $130,0002. Multiply by .85 = $110,500

(this .15 covers comm, closing & carry)3. Subtract desired profit = $20,000

4. Subtract the repairs = $50,4005. MAO = $40,100

Here your profit is visible and it’s all you have to make mistakes with!

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This is “Live Ammunition”A real deal that someone could do.

GEE will not be offering on this property as it is not in our target area.

Let us know next week what Happens and which of these houses is a better buy. (I would offer on both)

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Next Week Another Real Deal in the next stage:

Negotiating Round 2 in the Due Diligence Stage

After the first price is accepted.It will be a house that I have

currently in escrow.

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