Zillow, Redfin etc are great but don't trust the numbers!

2 Replies

I love Zillow and Redfin, Realtor too.; but I always do my own math especially up front. I really like to use rough estimates, 1% rule, 50% rule, etc. Just don't base it on the numbers you get from the listing. The taxes are typically based on some prior sale amount-generally off by 50%. Insurance is not based on any quote by a company that actually pays in case of a mishap or disaster. One of the biggest expenses for multis is water and sewer-as often as not it is overlooked completely! Cap table calcs are hilarious! I know these sites don't mean to mislead but the numbers are done by humans who are not investors; so make a point of doing your own. I go in with the assumption the numbers presented will be screwy. A favorite of mine is that phrase 'with current rents the cap will be 10%'. Yeah right! Determining current rents is not rocket science........ call a management co. or better yet go on an apartment site and come up with your own number. This stuff is just part of the fun of doing what we all love!

You're right you always have to double check the numbers. I know looking back on houses we've sold, they can have several different sales prices, and none of them are correct. 

They are a starting point but can depending on market be off by large amounts. 

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