Investor Comps vs. Retail Comps
Hey Folks,
So I've been trying to learn my market as much as I can from the access that I have (no MLS, using Redfin primarily) and I'm coming up with a question I'm not sure how to go about answering.
I've been looking at REO's and found a potential REO target (currently listed at $239,500). When I run recently sold comps I'm seeing comps in the $300k range for the neighborhood. So ARV would point to ~$300k. These are comps within the last month or so. One of the great things about Redfin is it allows you to see the history of the house. Well on a couple of these $300k comps, investors have previously picked them up in the $130-$170k range. Those comps are 4-6 months old, obviously a rehab buy & flip.
So obviously I'd want to try to pick it up in the $130-$170 range if possible but if rehabbed comps are pulling at $300 then at a $239.5k sale price the bank I would think, would already believe they are giving a great discount. Property has been sitting for 90+ days with multiple price decreases and was pulled once from listing already then relisted at a lower price. An offer of $130k is 54% of current asking which I'm assuming would not even get a look and might not even get submitted by the listing agent. So I'm sort of confused as to the best course of action in these situations. Any guidance or experience would be appreciated.
Most Popular Reply
Distressed comps shouldn't mean much to you. You'll probably care about the retail ARV and the rehab costs...those are why drive the deal...