How to know if the MLS property is good investment?

Question

Hello. So I've started my real estate road here in L.A. California.
I've conatcted 2 real estate agents, and told them both my budget and what am I looking for.
Now they emailing me some propreties they find intretsting on MLS. The thing is, I dont know how to tell if it's a good invesment.
I just don't know how to compare the prices with what's on the market. How can I get this information?

Account Closed · Answer

Use a combination of research like Bigger Pockets calculators and comps from the agents to see if it's a good investment. Keep in mind, what might be a "good" investment in LA could be a "very bad" investment in another part of the country. Compare apples to apples with your criteria and what's realistic in the local market.

Gregory Storm · Answer

I'm investing in the valley as well and what nobody has said yet, which I have no problem saying, is in general your average real estate agent has zero idea what makes a good fix and flip investment.  What they think is a good deal might be a good deal for a end-user retail buyer but not for somebody who is going to buy, fix, and flip for a healthy profit.

I'm just getting started as well and I'm in escrow on my first fix and flip in Woodland Hills.  I agree with @Jennifer Stutland's point.  Be very mindful of calculators that hard code in the "70% Good Deal Rule" because that does not apply in Los Angeles.  Most of the podcast episodes I've heard and YouTube videos I've seen are from people that are in markets where entire houses cost less than a fraction of a Los Angeles down payment.

To evaluate your MLS deals, make sure you know how much your money is going to cost you to purchase and hold the property.  You need to figure out what the dollar amount of profit you want to make.  What that number is is totally up to you.  But once you figure that number out, tell your agent that you only want to get listings where there is high potential to fall within your workable profit margin.

They should not be sending you every new listing.  If you're getting listings that have new kitchens and bathrooms with nice floors and great curb appeal, they are wasting your time because there is no money to be made on listings like that.  You want them sending you listings with paint falling off the exterior, horrible yards, dirty carpet, and old kitchens.

You should be looking for listings with yellow, pink, or green tile bathrooms.  That's where the money is.  Or at least the money I'm going for at this stage.  Good luck!

Alexander Felice · Answer

You should be analyzing tons of deals every day so when one comes across your desk you KNOW it's a good deal and can move on it immediately.

Tom Dunivin · Answer

Your realtor should be able to provide you with comps from the MLS. Ask for recent sales as they actually show what the market is, not just current asking prices.

Casey Murray · Answer

Know your desired rate of return (i.e. know your realistic numbers) and know your market. Ask the realtors if they invest in the area where the "deals" are located.

Jacob Wathen · Answer

Like @Tom Dunivin mentioned your realtor should be able to run comps for you. You should sift through the automatic search that your realtor sends you and shoot a couple properties that really interest you their way.

For my motivated investor clients I have a long list of their criteria and I will actively search for properties that fit their needs. I try to send a couple properties a day that fit their criteria with comps to establish ARV as well as an analysis depending on if they are looking to flip or buy and hold. If you are motivated and pre-approved I am sure your realtor will do what it takes to send you properties that they believe are a good deal.

How to know if the MLS property is good investment?

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