As you work this exercise, you will begin to see that the number of units (houses) sold begins to increase. At some point, the number of units sold will begin to get smaller and smaller. You can use a line graph to chart this. Take the group where the most units sold in the last 90 days and
doing the following, with data that is readily available from Zillow:
NO. 6 Avoid rural and outlier houses. Buy your widgets—I mean houses—where there are abundant and similar type structures and the demand is plentiful and can be demonstrated. Now that we have some house (product) specific fundamentals, let’s talk about supply and demand. We need to know the high mark of supply and demand in our market. This is our “bull’s-eye.” In my world, we define the bull’s-eye as 70 percent to 90 percent of the median sales price in a typical metro market. How can you find the bull’s-eye in your market? It can be quite a project, but you can test the 70 percent to 90 percent rule by
NO. 1 Write down the number of houses that sold between $0 and $25,000 in the past 90 days. NO. 2 Then, write down the number of houses that sold between $25,000 and $50,000 in the past 90 days. NO. 3 Then, write down the number of houses that sold between $50,000 and $75,000 in the past 90 days.
> Continued to :: PG 136
Rob Caldwell is a real estate investor who has been affiliated with HomeVestors for the past 10 years, after a stint in the Army and time as a flight instructor. He comes
from a real estate and entrepreneurial background with a father who was a commercial, agricultural and residential builder and developer.
NO. 4 And, so on ...
thinkrealty . com / mag | 35
Made with FlippingBook Online document