Evaluating the real value of a property both in it’s current condition and the ARV is essential for profitable real estate investing. If you haven’t been watching the property values in a given neighborhood for a couple of years and know the ins and outs of the different property types there this can sometimes seem a little difficult. What looks like an amazing deal to add to your resume of flipping houses could quickly turn into a nightmare money pit that sucks you dry. Taking too long to figure out the value of a property and forking out for full appraisals on every prospective deal you look at when real estate investing can also break the bank. So how can you evaluate deals quickly and effectively to make big profits from real estate investing?
Zillow has obviously become one of the most popular tools for those involved in real estate investing that need to assess values quickly. However, anyone who really knows what they are doing will have figured out by now that it can often be wildly inaccurate. This can either mean missing out on properties that were good deals for flipping or acquiring properties at prices that are too high. However once you get the hang of it you can get a good feel for how the values vary in different areas of the country. Zillow can be useful for quick reference as you are flipping homes, but should not be your only way to judge the value of a home.
Realtors can offer a great resource for pulling comps and give you a better idea of what is really going on the in local market so you can make more educated estimates on value, however unless you are throwing them business regularly they can get tired of spinning their wheels for nothing. Perhaps the most accurate way to assess the value of homes consistently while you are real estate investing is by using AVMs. These are like mini appraisals done by pulling comps and not physical inspections. They are very cost effective and are provided by the same appraisal companies that do reviews for banks and mortgage lenders so you can be confident the values will hold up for buyers you are flipping homes to that need financing.
