If you’re considering buying a home to fix and flip, the time to calculate fair market value is before you make the purchase. Even if you think it will be the deal of the century, the price you pay for the home now doesn’t necessarily have anything to do with its fair market value. The real estate market is constantly moving, and what’s high today could be low tomorrow. It usually doesn’t happen that quickly, but you’ll need to be aware that even a month or two can make a huge difference.
Calculating Fair Market Value
Calculating fair market value is not always easy—especially if you’re not a Realtor®. You’ll need to know what other homes in the area have sold for recently, so looking at the listing price of a home or outdated information won’t give you the information you need. If you don’t turn around a home quickly, the market value may have already changed.
If you’ve decided that fix-and-flip will become your investment niche, it would be a good idea to form an alliance with a real estate agent for several reasons. Not only will he or she be able to help you turn around future investment properties; your real estate partner can help you calculate fair market values accurately. While websites such as Zillow are available, they do not provide solid figures. In fact, the estimates they provide can be off by as much as 18 percent. (That’s a lot in both directions!) In addition, Zillow allows homeowners to update home information; that can make it tough to separate fact from exaggeration. Perhaps most importantly, a lot of the data is outdated.
Do You Need a Hard Money Loan in Atlanta?
If you’re looking for a hard money loan in Atlanta, we may be able to help you.
Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value.