Posted by admin on 29 Apr 2010 8:12 pm. Filed under
Estate.
Joseph Kayode
A real estate appraisal also known as a property valuation surveyor or land valuer is the practice for evaluating the worth of the real property on ground, usually its market value, value-in-use, insurable value, investment value and liquidation value. These are to be done to know the right value of a property before decisions are made.
A real estate appraisal is highly important to investors. An appraisal is a third party that will come in and decide upon the worth of a property. He will oversee the interior and exterior of the property and other properties in the area and then will proceed to determine how much the property will worth. An appraisal is done for both the buyers and sellers because, while the buyer does not want to overpay for a property, the seller does not want to sell his property for less than its worth. It is highly advisable to buy or sell a property after it has been valued by an appraisal.
Property valuation is performed by an approved or qualified appraiser (also known as estate valuer or land valuer in most countries and in British English as a “valuation surveyor”).
The real estate appraisal is done using various methods such as: cost method, income method, and sales comparison method.
Cost method involves the estimated cost of improvements in the property, value of the land and deterioration factors.
Income method is used to value commercial and investment properties. This approach is generally considered the most applicable valuation technique for income-producing properties.
Sales comparison method compares the sale prices of similar properties that have been sold recently.
Doing a proper appraisal with various methods explained above will help you to know the right value of a property in order not to overpay for a property or sell property for less than it’s worth.
Peter Vekselman
Real Estate Wholesaling Overview
What is a Property Locator?
Determining After Repair Value (ARV)
Real Estate Wholesaling Overview
The Wholesale Real Estate business has been around as long as people have bought and sold real estate. In good times and in bad, there is always money to be made buying real estate at a discount and selling it for more than what it’s paid for.
A true Real Estate Wholesaler purchases real estate as low as possible and resells it at a higher price to other investors. Typically, the investors that purchase from a wholesaler are in either the retail or rental business. This means that once the investor purchases the property from the wholesaler, they will make necessary improvements to the property and then either rent it out, or sell to those who wish to live in it.
Most Wholesale Investment companies hire what’s known as a Property Locator to identify, locate, evaluate, and secure discounted real estate. Once the Property Locator secures a deal that meets the investors buying criteria, the investor quickly purchases and resells the property for more than what he/she paid.
Commissions are generally paid in one of two ways. The Property Locator is paid a flat commission when the wholesale investor purchases the property, or the Property Locator gets paid a percentage of profit based on the resell of the property.
Whether you’re a Property Locator or a Real Estate Wholesaler, there’s a lot of money to be made in the real estate investment industry.
What Is A Property Locator?
A Property Locator identifies, locates, evaluates, negotiates and secures discounted real estate for an investor to purchase. Property Locators use the following three factors to evaluate a piece of property.
After Repair Value (ARV)
Cost of Repairs
Wholesale Property Price
All properties are evaluated and offers made based on the above factors. A property is only a “good deal” if it can be bought for the “right price.” Successful property locators know how to arrive at the right price for a property by determining its
After Repair Value, estimating the Cost of Repairs, and using these two figures in a simple formula to derive the Wholesale Property Price.
Determining After Repair Value (ARV)
The method commonly used by real estate agents and appraisers to determine the market value of a property is called Comparable Market Analysis, or CMA, the appraisal being more complicated and detailed. We use here the simpler method preferred by agents. Comparable Market Analysis is based on the assumption that houses in the same area of similar size, number of rooms and other features will have similar market values.
When the comparable properties are all the same size, finding the ARV is easy. The more alike the comparable properties are the better. When the “comps” are not identical to those of the subject property, there is a method for determining the approximate After Repair Value based upon the average price per square foot of the comparables.
To calculate the average price per square foot of your comparables, divide the selling price of each comparable property by its square footage to derive the price per square foot. Add the prices per square foot of all your comparables together and divide by six (the number of comparables) to get the average square footage of your comparables Although the average price per square foot method of estimating the ARV is not as accurate as a good appraisal, it is reliable enough for our purposes.
Note: The approximate square footage can be calculated by measuring the length of the outside of the house by its width. Tax records can also be checked to find out the square footage, although they must be verified to be correct, since tax records do not always reflect remodeling and additions that have take place over the years. Do not count unheated spaces such as attics and porches.
Best regards,
Peter Vekselman
P.S.
To get started as a Property Locator with The Real Estate Arena, follow the link below:
Posted by admin on 6 Apr 2010 2:42 pm. Filed under
Estate.
Jennifer Bailey
The United States real estate market is growing faster then ever before. Sarasota has become a pre-construction real estate hot spot. Pre-construction is the most profitable phase of investment in real estate. New construction offers a wider choice of location and layout, with the most desirable finance options. Pre-construction is considered a healthy investment, making investors wealthy beyond their wildest dreams. Investors in pre-construction real estate are willing to take bigger risks for a chance to make huge profits.
Sarasota has for long been an upper class vacation destination with its pristine white beaches, exciting nightlife, 5 star restaurants and hotels, and its interesting mix of cultures. The Sarasota pre-construction market has witnessed a boom in the last few years. There are downtown condos, beachfront high-rise condos, single-family residences and mansions under development. Sarasota is a sellers market and most properties remain on the market only for small period.
Prices of Sarasota real estate in its pre-construction stage are significantly lower and more affordable to the investor. Pre-construction sale has shown a significant increase over the years and continues to grow. Investors have the advantage of not having to pay any local and state taxes for many years.
Pre-construction deals are usually not advertised in the initial stages. Deals are mostly brokered via a network of estate agents who sell directly on behalf of the developers. Brokers reserve a number of units for their top clientele. The second stage of construction brings on a 10% increase in price. On selection of a property, an investor pays a deposit of around 10% of the purchase price. An additional 10% is usually paid within the next three months. Investors are able to sell their units within a year at a profit of 20% or more.
The increasing interest in Real Estate investment trusts shows that real estate investment return is becoming an important part of a Sarasota investor’s investment portfolio.