78 DEAN GRAZIOSI
desired profit if the deal happens. I had Matt take me through exactly how he is using this method right now to do deal after deal, and these deals always have a profit built in. Here’s how it works.
What to Pay for a Home
Find The Comparable Sales in Your Target Areas
Many students often ask me, “ How do you know a great deal when you
see one? ” To realize you have a great deal, you have to know what the property is worth. To determine value of a given prop- erty, you should acquire comparables from your realtor. Comparables, often called “comps, ” are the properties you select to compare to the one you’re considering buying or locking up on contract to wholesale. These comparables should be sold properties similar to the one you’re valuing, they should be in the neighborhood, and they should be recently closed sales. We don’t use active listings simply because an asking price is just that-- something someone would like to get. It can have little or no relationship to reality, depending on who’s doing the asking. If a property is pending or contingent, we do not use these as comps because these sales are not yet complete. People list $100,000 homes everyday for $175,000 or more, so we only want to look at homes that have sold and the prices that were paid for them.
We also want them to be recent sales, since older sales may no longer reflect the current market. Also, they need to be in the
Made with FlippingBook - Online magazine maker