Declining Wholesale Markets

0:00
what is up everybody we are live with
0:02
investor thrive is real estate nate and
0:05
i got my man
0:07
hey
0:08
hey knows the ways let's get it done
0:10
today we're basically going to talk
0:12
about today guys um how to analyze
0:15
properties right now in a declining
0:17
market because it's extremely important
0:19
for you guys to know that you cannot use
0:21
comps from a year ago two years ago even
0:24
i mean 90 days ago yes yes sorta but i
0:27
mean with interest rates have been
0:28
changing and the property value is going
0:30
down you can't you got to comp a little
0:32
bit differently right now so that's what
0:33
we want to talk about and sean what is
0:35
what is this call brought to you by this
0:36
call is brought to you by brought to us
0:38
by batch leads
0:41
please click the link below we have a
0:43
link for you 5 000 free records if you
0:45
join a free trial it's for seven days
0:49
you know and if you're looking to pull
0:50
quality data to get quality deals then
0:53
you've come to the right place batch
0:55
leads come on down come on down
1:03
sean why is it so important to uh you
1:06
know comp deals a little a little bit
1:08
differently than nor people normally
1:10
have been for the last uh you know a
1:11
little while it's a great question dave
1:13
there's a lot of reasons why i think the
1:15
most important one is that if you're
1:17
going to
1:18
wholesale it
1:19
and you you're going to look for the
1:20
data you need to come up with a number
1:22
right that you need to offer
1:25
and if you don't even know what it's
1:27
worth you know how are you gonna
1:30
backtrack your way into your max
1:32
allowable offer if you don't know so
1:34
that's really important um and then of
1:36
course is if you're gonna buy it right
1:40
then you definitely don't want to be
1:42
you know looking at data from yeah like
1:44
nate said a year ago six months three
1:46
months ago probably about as far out as
1:48
you want to go let's just dive right
1:49
into it how do you value properties now
1:52
well what you have to do because you
1:54
can't if there's not enough data on sold
1:56
comps that's recent within the last 30
1:59
35 days 60 days you have to go off of
2:02
what's selling right you have to go off
2:04
of what's listed what's active right so
2:07
um how do you do do that using batch
2:10
well it's pretty simple guys let's let's
2:11
go right into it so a man that's a small
2:14
town nate what are we at so i want to
2:17
show someone really quick so there's a
2:19
lead i went to college out in rexburg
2:22
idaho and i know no one's really ever
2:24
probably even heard of rexburg idaho but
2:26
it's a pop in place
2:28
rexburg is right here
2:30
and it's got you know
2:32
a lot of good investment properties
2:34
because it's a college town right here
2:35
is idaho falls and then later on is
2:38
pocatello so
2:40
if you don't know eastern idaho you're
2:42
probably like dude there's no deals out
2:43
here but there are there's a lot of good
2:45
investment opportunities and basically i
2:47
have a deal right here there it is
2:49
that's the house and she's like hey you
2:51
know we're looking at some comps you
2:53
know according to the comps recently uh
2:56
in the area like that's sold in the last
2:58
year the house is worth this and i i'm
2:59
basically i'm calling her and letting
3:01
her know i've already told her this but
3:02
i'm like hey um it's not really worth
3:05
that right now because of the the
3:06
changing in the interest rate so what
3:08
you can do with batch is you just search
3:09
the address
3:11
and you um you know you
3:13
you mark it with the boundary area and
3:16
you can see what's active and guys this
3:18
is a very small town and there's a lot
3:20
of active properties right so
3:23
a small town the active is green so for
3:25
me as an investor
3:27
i'm like
3:28
of course this is a small town so i'm
3:30
gonna tell her hey look i just don't
3:32
feel comfortable investing in this area
3:34
but um you know according to this
3:36
there's quite a few active properties
3:37
that aren't moving that quick and you
3:40
can click on let's go this one that's at
3:41
130.
3:43
so her house is because i've looked at
3:45
this before her house is a two bedroom
3:47
one bath as well 900 square feet this is
3:50
720 square feet so you can go to the
3:52
details and this one is actively listed
3:55
for uh 130 000 according to this
4:00
but you know then you got to determine
4:02
if it's a a legit comp this is a mobile
4:04
home and it doesn't look terrible but
4:06
it's it's it's not necessarily the same
4:09
comp because it's uh
4:10
and it didn't even look to be like it
4:12
was in a foundation it's before 1975 so
4:14
bank wouldn't even lend on it right not
4:17
a comp at all um
4:19
yeah right but you would use this
4:21
somewhat to basically like help you
4:23
determine the value right so yeah yeah
4:26
for sure it's selling okay so hers is
4:28
over here so let's see
4:31
um and so how much nate where how much
4:32
were you uh ballpark what's she asking
4:35
uh she wanted 220 uh or 230 cash okay
4:39
and i told her um you know i'm gonna
4:42
have to be around 150. and i just
4:44
reached out to her the other day i i
4:46
what can you buy in that town right now
4:48
what's for sale that's under that number
4:50
that she's asking under 220 yeah
4:54
um i mean you're an investor right what
4:56
else can you get for t20 let's look i
4:59
meant for sale right now at the moment
5:01
it doesn't look like much is under 220
5:03
but you also look versus a 2-1 right
5:07
this one this one let's look at this one
5:10
this is a 3-1
5:11
129 square feet
5:14
uh
5:14
let's take a look at it right but then
5:16
you also have to determine how long has
5:18
this been on the market yes it's been
5:20
just sitting there look at this this has
5:22
been on the market since 11 10 20 this
5:25
is actually 21 because i i know i've
5:27
looked at this so this house these
5:29
people are just sitting hoping someone
5:31
will buy this piece of trash and they're
5:33
not moving off of their listing price
5:34
all right let's see if she answers the
5:36
phone
5:38
if she doesn't she's getting the double
5:39
triple quadruple dial for saturday
5:41
morning oh brother but wait a minute
5:43
it's uh yeah it's uh what time is it
5:46
over there for her
5:48
oh shoot you know i forgot i'm on the
5:50
east coast so it's uh what is it
5:55
wider up
5:56
lighter up she might she might be ready
5:59
brother
6:00
let's give it a shot
6:05
can you hear that ringing sean you can
6:06
hear it beautifully
6:08
crystal clear you're so clear
6:15
oh guys we're getting we're getting a
6:16
call from our girl
6:18
okay guys this is uh this is it
6:20
hello hi jennifer how you doing this is
6:23
nathan hi i'm good how are you jennifer
6:25
i want to apologize i don't know if i
6:26
called you too early um is did i wake
6:29
you up no no i was actually in uh in a
6:32
meeting room so okay
6:34
yeah i know you're good i didn't know if
6:36
i woke you up so
6:37
again another thing i want to apologize
6:39
for is i know i haven't reached out to
6:40
you in a while it's just i've been
6:42
extremely busy with work and we got some
6:44
flips going on so i'm sorry about that
6:46
oh no that's okay so jennifer um do you
6:48
have about five five minutes or ten
6:50
minutes to chat yeah i do okay so about
6:52
the property i mean last time we talked
6:54
i was kind of gave you an idea of where
6:56
i was thinking we would be around did
6:57
you get a chance to talk to um your
7:00
family or husband about it yeah that's
7:02
that's gonna be too low on that yeah
7:04
yeah i totally understand i mean i know
7:06
i offered you what i felt like uh was
7:08
you know something we could do have you
7:10
have you since we last talked have you
7:12
you know what other options have you
7:13
looked at have you talked to other
7:14
investors thought about listing it um no
7:17
i haven't talked to anyone we're we're
7:19
just gonna um list it my husband wants
7:22
to list it okay he's listing it do you
7:24
know when you're gonna pull the trigger
7:25
on that um well i need to get stuff
7:27
cleaned out so um probably in the next
7:30
week too okay i'd like to do that so
7:32
gotcha yeah so i basically this is the
7:35
reason i was calling you is because you
7:36
know right now i don't know if you you
7:38
follow the real estate market too much
7:40
but you know it's the interest rates are
7:42
causing properties values to go down
7:44
unfortunately
7:45
and um you know i personally like i was
7:48
looking at it if i were going to buy it
7:49
if we agreed on that price or around
7:51
that price i was one i wasn't sure if i
7:54
felt 100 confident investing in in that
7:56
area because you know how it is like
7:58
it's going to be a little harder to you
8:00
know resell the properties but i
8:02
actually have a couple investors that i
8:04
know in in rexburg and idaho falls in
8:06
that area that um you know i could
8:08
potentially reach out to and say hey
8:10
guys like would you be interested in
8:11
going on you know this property on this
8:14
project so it's just not me right so i'm
8:15
not just you know doing it by myself but
8:18
i wanted to see if that would be an
8:19
option that you know you'd be okay with
8:21
if i could you know reach out to them
8:23
and see if they'd be interested in
8:24
flipping the house with me i i wanted to
8:27
check on and see if you'd be cool with
8:28
that i'll get back to you like i said
8:30
once you text me back if you give me the
8:31
okay i'll send that over to your email
8:32
and we can just continue and like i said
8:34
it's just a seven day period it's not
8:35
gonna i'm not tying you up for you know
8:37
month or months okay thanks jennifer all
8:39
right okay thank you all right bye i
8:42
read on this before this call and about
8:45
170 i think the arv of the property
8:47
let's just look at it one last time so i
8:49
think uh this house the two one it's a
8:52
thousand square feet and if you look at
8:54
what houses are selling for right now in
8:56
this area again we're not going to go to
8:57
solds because that's not useful but this
9:00
property right here is a three one it's
9:03
about a thousand square feet right uh
9:05
without 129 square feet bigger than hers
9:08
and mine was a two one right yep so this
9:10
one is a year 1900 right super super old
9:13
and it's not it's outdated hers is not
9:16
that bad according i have actually have
9:18
a video so this is
9:20
this has been on the market for so long
9:22
so i don't think it's a legit comp 300
9:24
000 but i believe hers is worth about
9:26
250. so i really believe it's worth 250
9:28
so i'm going to type it in our
9:30
wholesaling calculator i'd have to find
9:32
someone in in rexburg or someone that
9:34
would want to rental in that area so i
9:36
think this house is worth about 250. um
9:39
i offered her 170 1000 square feet and
9:42
she showed me video she says it's not
9:44
that outdated um yeah it actually didn't
9:46
look bad when we looked at it last time
9:47
didn't you i think we did we looked at
9:48
it together on let's actually look at it
9:50
i have a video right here
9:53
yes okay beautiful yeah so they got the
9:55
lpv on the floor i mean you know
9:58
they went ahead and
9:59
slapped them granite on some old
10:00
countertops but what are on small
10:02
cabinets that's okay flooring doesn't
10:04
look bad yeah the lpv's seems like it's
10:06
in okay shape
10:08
um
10:11
it's just outdated
10:14
yeah i mean it needs it needs some tlc
10:16
you know some doors some new doors some
10:18
new knobs some new lights fixtures right
10:20
but again you're in a smaller more rural
10:22
area um
10:24
cleanly you know
10:25
having a nice ac unit or whatever right
10:27
i mean the the
10:29
the way you would do a flip here is not
10:31
the same way you do flip you know
10:33
i meant to be honest this is clean like
10:35
i think if you just clean the house out
10:37
it you know it looks good yeah i think
10:39
the house probably needs about ten
10:40
thousand it's not i mean you're not
10:42
going to do a full-blown rehab in this
10:43
area you might even just want a rental
10:45
in this area and see what rents go for
10:46
but you know you're gonna list it we we
10:48
have connections so listing commissions
10:50
will probably just be three percent for
10:52
us in that area so if we got it at 170
10:54
and wanted to make a wholesale fee of 10
10:57
15 000
10:58
the flipper if he flipped it got it 170
11:01
paid us 15 put 10 into it paid all the
11:04
holding costs he'd make 34 000 in four
11:06
months and we'd make 15. so if we
11:08
decided to flip this ourselves instead
11:10
of wholesaling it we'd make about 49.
11:12
now i think that's pretty conservative
11:14
250 is the arv considering you know it's
11:17
not no that that bad even um the other
11:20
homes in the area that are above this we
11:22
had some other pictures right there was
11:23
some other stuff too not in that video
11:25
like it's not it's not that bad of shape
11:27
so yeah i mean normally you guys we say
11:29
overestimate when it comes to rehab but
11:31
let's overestimate then so even at 20k
11:34
if we wanted to make 10 000
11:36
most most flippers want to make 20 10 to
11:39
12 of the arv on their flips so this
11:42
would hit right in the office well 10 to
11:44
12 gross return on the sale price of the
11:46
property right so that would be 250 000
11:48
times times 0.1 that gives you 25 000.
11:50
so that pencils that is what you call a
11:53
deal to pencils but the problem is it's
11:55
so rural someone might be like look it's
11:57
more i mean i need twenty percent
12:00
right yeah exactly i am curious i don't
12:03
know if batch will let us know but what
12:05
rents are going for in this area usually
12:07
it does it's estimated right 7 30 788 i
12:10
don't think that'd be like the greatest
12:11
return i mean if you get on terms it
12:13
would be sick right it'd be great on
12:15
terms but yeah not probably no
12:17
definitely not straight cash so again
12:18
guys we usually don't waste i don't want
12:21
to say ways we don't put this much time
12:22
into property like this i'm just showing
12:24
you an example of how to you know comp
12:27
properties the right way use an option
12:28
to purchase agreement and negotiate with
12:31
the seller she wanted i originally
12:32
offered her 150 and she wasn't willing
12:34
to do that but she's probably open at
12:35
170. give me seven days i'll find
12:37
someone if i don't you know and then
12:39
let's say i found someone 165 and say
12:41
hey i found someone 160. i need
12:43
obviously i'm they're going to pay me so
12:44
don't worry about it um but this is this
12:47
is what i can do to get it done and if
12:48
she says no and list it and it's going
12:50
to sit on the market for uh you know a
12:51
couple couple months never give up
12:53
ladies and gentlemen go back and make
12:55
your offer again if they do it you know
12:56
don't give up represent your offer
12:58
that's the jerry norton special you say
13:00
you keep calling say my offer is still
13:02
good you remember that 155 i sent you
13:04
four months ago it's still good
13:06
that's the beauty of making an offer
13:08
that you know is a deal that if it
13:10
doesn't sell you're confident you can
13:13
always go back and you know hey it's
13:15
still good at that number i'm still good
13:18
make offers that you can stand up on and
13:20
feel good about yeah and you want to get
13:22
something down so you make some money up
13:24
front from the person that you sell to
13:25
on a lease option or rap you want money
13:27
that's how you make money okay this is
13:28
the next question i love it keep the
13:30
questions coming and sean hey if you got
13:31
to go sean i ain't going to be mad i
13:33
know i'll be taking it i do have to
13:34
leave it a second but uh let's see how
13:36
do you make the make sure the seller
13:37
makes the mortgage payments when you're
13:38
making payments to the seller services
13:41
yes there is company yes
13:43
you can either use a servicing company
13:44
or you can get the seller's uh login
13:47
information uh to pay their mortgage and
13:49
you can pay it directly for them like at
13:51
their login which i've we've done before
13:53
anyway guys uh that that kind of pretty
13:54
much wraps it up uh for today i wanted
13:57
to let you guys know those are what i
13:59
wanted to talk about it's been a long
14:00
conversation thanks for tuning in but
14:02
anyway guys in today's market with the
14:04
declining uh you know prices that are
14:06
going on
14:07
you want to use not if you can use sold
14:10
data if it's relevant right if it's
14:12
within the last couple you know 30 days
14:14
35 40 60. but if you go a year six
14:18
months it's not going to be relevant so
14:21
you've got to use selling data and if
14:23
you're not sure and you don't want to
14:25
lock up a seller where you're you know
14:27
you're not sure you can get it done
14:28
because it's rural you don't know the
14:29
area use an option to purchase agreement
14:31
people use them all the time don't get
14:33
don't die on that don't live and die by
14:35
that sword uh because you know
14:38
peep sellers want uh consistency and
14:40
they want you to be sure they want you
14:42
to be confident um so
14:45
don't use that all the time but use it
14:48
where you feel needed okay all right
14:49
guys have a great saturday and uh thanks
14:51
for tuning in and by the way this call
14:53
has been brought to you by batch leads
14:54
if you haven't tried them out you need
14:56
to try and we use in our business all
14:57
the time you get a seven day free trial
14:59
and we will catch you
15:02
later peace out
15:19
you