How to determine current value of SFR

7 Replies

Good morning everyone,

I'm interested in purchasing a SFR from another real estate investor. It is currently rented out and seems to cashflow very nicely. I'm still working through some things but all the numbers look great so far.

My only question is...how can I determine the current value of the property? Zillow, Trulia, and Redfin are all over the board. This is also a few towns away from my core area. This is going to be a small cash deal and neither party is represented by an agent. Nevertheless, should I just call up a local agent and ask them to price it out? I'm not buying it for its appreciation, but knowing the true value would be a helpful piece to the puzzle.

Without having a realtor, or at least access to the MLS, good comps might be tough to find. The best place to find them might be the city/township assessors office, which will have records of all the sales in their area. Most of these sites are free to the public, although a few seem to require a nominal fee to search. I would go back 4-6 months and do your best to find a home that is similar in age, size, and neighborhood.

I don't frequently use ZIllow or Trulia, but I know they not only show houses for sale, but also recent sold properties. This could also give you a good idea of what houses are selling for.

@Derek Martin You had mentioned that this property is near your core area, do you have a realtor you work with there? If so, have them put together some comps off the MLS for you where the subject property is located.

If not, you can try the town assessors office as mentioned above.

Get concrete numbers though before proceeding.

Michael Noto, Real Estate Agent in CT (#RES.0799665)
860-384-7570

For a quikie, I have found eappraisals.com to be conservatively accurate. 

Thanks,

Matt

I will check out all of these suggestions. Thank you all!

@Derek Martin  - If you do not have a Realtor you can search on redfin.com for active, pending, and sold listings

Then there is an option on the bottom left to download the data

From there you can "pull comps" You are looking for 3 properties that are active, pending, and sold that are in the same general condition.  They also want to be with 15% of the square footage and in close proximity (use 1/2 mile if city about 1 mile in burbs)

Brie Schmidt, Real Estate Agent in Illinois (#471.018287) and Wisconsin (#57846-90)
Originally posted by @Derek Martin:

Good morning everyone,

I'm interested in purchasing a SFR from another real estate investor. It is currently rented out and seems to cashflow very nicely. I'm still working through some things but all the numbers look great so far.

My only question is...how can I determine the current value of the property? Zillow, Trulia, and Redfin are all over the board. This is also a few towns away from my core area. This is going to be a small cash deal and neither party is represented by an agent. Nevertheless, should I just call up a local agent and ask them to price it out? I'm not buying it for its appreciation, but knowing the true value would be a helpful piece to the puzzle.

Hi Derek,

The way that we do it is with a quick search on Zillow of the most recent sales surrounding the target property. We then confirm those sales on the county website as Zillow has proven to be inaccurate in the past. You can use these sales as a guide as to what your target property is worth. Always underestimate the value and if the numbers still work you will know its a great deal.

The city appraisal is BS in my opinion and so are BPO's.

I also believe that in lower end areas there currently isn't any true value and it just comes down to what cap rate the investor wants to achieve.

I have seen houses sell for $2,000 in these lower class areas and then another one across the road for $80,000 (unsuspecting foreign investor).

Thanks for reading and have a great day.

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