Running MLS Comps in Non-disclosure States Made Easier

Do you live in a non-disclosure state such as Texas and are having a difficult time running comps? I know how you feel because the majority of deals I’ve done have been in Texas. I remember calling agent friends of mine and asking them if I could get a comp on this house and that house and eventually, they changed their phone number because they got tired of doing all the work and receiving nothing for it. Then it became a guessing game and that’s not good logic to follow but hey, you got to do what you got to do to make things happen. I know some agents will even give you their login credentials, so they don’t have to do the work and keep you happy. The MLS has figured this out so I wouldn’t recommend it. Some real estate investors even get their real estate license for this very reason.

In non-disclosure states where sold prices are not shared to the general public, makes it more difficult for real estate investors evaluate a property’s value. Until Now, Keep Reading!

First, let’s discuss why we need to know what other homes have sold for and what exactly is ARV. Running accurate numbers is the difference between making money or losing it. When determining a property’s value, we call it ARV or After Repaired Value.

What is After Repaired Value (ARV)?

The After Repaired Value is what someone will pay for a property after it is fixed up completely, all repairs made and in a “ready to move into” condition.

How do you determine the ARV?

The first thing you’ll need to do is get the most recent and comparable properties that have sold (Comps) and calculate the cost per SQFT. So, if a property sold for $100,000 dollars and the square footage was 1,000, simply divide these two numbers and you will get $100 per square foot. Now do this with at least 4 other properties that are similar.

Example:

4 Comparable Properties Cost per Square Foot

$100 + $107 + $105 + $115 = $427

$427 divided by the total number of comps (In this example, 4)

$106.75 (This is the average cost per square foot sold.)

$106.75 X Total Square Foot of Subject Property (Let’s say it’s 1,400 SQFT)

$106.75 X 1,400 SQFT = $149,450 (After Repaired Value)

The ARV is the most important number in your calculation.

Where do I get Comparable Sales?

Well, in a non-disclosure state, you will either have to get them from your local real estate agent, or Now Available in the REIPro Real Estate Investor Software. www.myreipro.com.

REIPro software now comes with MLS sold comps in all non-disclosure states which covers about 92% of the MLS’s. This also includes a 10 history which is great for previous sales.

When comparing properties that have sold through the MLS, you should also consider the condition of the property, distance from subject property, bedrooms, baths, sold date, square footage, year built, and any amenities compared to the property your evaluating. They should all be similar.

Although these are just MLS sales and not for sale by owners, most homes sold in the U.S. are sold through the MLS. So it’s quite obvious that these would be the best numbers to use.You can start a free 30-day trial at: www.myreipro.com