I'm starting to get back into routine of looking for new properties. Two days ago, I went through my lists of contacts and emailed people who responded to my post on birddogs. One person responded with a property and I checked it out yesterday at lunch. I don't think this one will work. The guy thinks it will sell for $210,000 to $215,000 when fixed up, but I don't see it. The neighborhood isn't that great and the comps I am pulling show prices in the $170,000 range - which is his asking price. The guy is a real estate agent and the property has a sold sign on it from another agency, so I'm thinking this guy is a wholesaler. If I was going to rent the place, it might be worth it, but for a flip, that price isn't low enough.
I'm curious to see where this guy got his comp figures from. I found two recent sales close to that price range, but they are in better neighborhoods (although just a couple blocks away). Coincidently, if you take 80% of the midpoint of his comp range ($212,500), you get his exact selling price - $170,000. Since I listed 80% of FMV as one of my buying criteria in my email, it makes me wonder if he just worked backwards from his selling price to tell me a comp range that would meet my requirements.
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