“Everything doesn’t have to turn out exactly how you planned in order for you to call it a success.”
– Neale Donald Walsch
Here’s a question I received yesterday:
“Maestro, how do I best learn my market? I’ve read information about this and understand this is important, however, I have yet to have anyone explain this to me step-by-step.”
Great question! I’m not sure there is a step-by-step answer, but here are some things you can do.
1. Partner with a Realtor
This should be done regardless. Realtors are a wealth of knowledge about the local housing market. And, they can also provide access to the MLS, which is a huge advantage for a wholesaler.
A great trick is to look up a property on zillow.com. Once you click on it, it will list several realtors that work that area of the city, including contact information. Don’t be scared to call them up. Explain that you’re looking at buying a house in the area and wanted to know if they can provide some insight.
Once you know the average price per square foot of an area or neighborhood, then you’re good for a bit. The housing market is constantly in flux, so don’t rest on that number for too long. But, it should hold firm for a bit. Then, you can say, “The south side is going for $100/sq ft. The north side is $50/sq ft.” And on and on and on…
2. Flip some houses
Nothing takes you farther than actual experience. Even if you end up losing the deal because you fudged up the numbers. At least now you know and can move forward with future deals confident in your knowledge of that area.
3. Pull comps
Go on Zillow, or Trulia, or FreedomSoft, or the MLS or whatever and start typing in addresses in specific areas that you think are ripe for flipping. Drive around the city and find the lower income areas. Chances are you already know these areas, unless you’re new to the city.
When you pull the comps, you can see what they sold for. The wholesale flips will be roughly half, or a fraction, of the retail sales. So, if you pull 3 comps and two of them sold around $100k, with one at $60k, all within three streets of each other, you pretty much know what the ARV is, the avg p/sq ft and what wholesale deals are selling for.
Now get out there and flip something!
This is the absolute perfect time to get into wholesaling. The market has shifted. We’re seeing double-digit gains in home value, and because of this, it’s now a seller’s market again! This is just like it was during the housing boom… when we were flipping houses for $50k in profit… per flip! Check out my bio above and grab you free investing blueprints.