How to Evaluate True Property Value (Off-Market Foreclosures)
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How to Evaluate True Property Value (Off-Market Foreclosures)

How to find the true
value in a foreclosure lead. Hey guys, my name is Liran Koren. I’ve been investing and
listing for the last ten years, and flipped over 1,000 properties. In this video, I’m gonna
show you the importance of moving your deal and how fast
you need to move your deal. And what kind of information
you need in order to do your evaluation correctly, and get to a value that
you’re comfortable with. When I’m looking at this slide again, when I’m thinking of what to do, okay? What is my next step right now? It’s obviously, I’m going to check value. So I’m just gonna go again, I’m gonna go to the property appraiser where I am very comfortable
doing my quick- let’s call it Quick Value Checks. Because I don’t really
need more than that. I have so much money to play
with: $172,000 worth of equity. Doesn’t matter really if it’s worth $260 or $240 at that point? Not really, right? I want to have that! So, I’m just gonna check,
I’m just gonna check what is the value. So, let’s see really
what we can sell it for. We all want to end up at the end result. Real estate is very exciting,
and owning real estate at discount is a great feeling. But there is no great feeling
than reaching your end goal. Okay? So, the race finishes when you settle. So don’t get overexcited, and don’t get overconfident
with yourself, okay? You gotta sell, and you gotta sell fast. And this is what’s gonna make you, uh- this is what’s gonna be impressive to me as a deal as a whole. It’s gonna be fast, it’s with
a strategy, it’s in, it’s out. Okay, you didn’t make
as much as you could, but you made it, and you really made it. There’s no speculation about that. So I’m gonna go into value right away. In the property appraisal
of Broward County you can do a “view as a map” and in many counties you
can do the same thing. So if I go here, and I zoom out, right? I would see basically the area
that I’m speculating about. And I would do a search. Luckily enough, we have a search ready about Boward County property appraisal. We have a search that
allows us to search by last sales by year, so if I choose a sold by the year of 2009, I do not have anything yet. Or do I? I just started here, so we don’t have enough things
recorded, let’s go to 2018. Alright, 2018 much easier to look at. Especially in the close area. If I go 2018 and I expand it back, I’m sure I’m gonna find results. But it’s gonna be too
far for me to look at. So I wanna see what’s sold, really- the nearest to where I speculate about. So, that’s why I’m
gonna choose 2018 sales, and I’m gonna zoom in, into the area which I’m looking at. So I see this property was sold for $185, and I’m gonna check and see
exactly what was the deal. I wanna check, I’m gonna
compare this property to the property that I
am speculating about, which is this property right here. This is the property that is going for- apply for foreclosure, call it this way. The bank just started a lawsuit,
and the guy is in trouble. He’s got a lot of equity in his home, and we wanna see if we can
walk out the deal with him. So I can see that this was sold for $185, and this was sold for $255 in 2018. $290, $260, $247, okay, and $260 etc. $300, $295, so we’re
looking at the mid-200’s and we’re looking at
really cheap sold here, and a looking high sold here. So I’m gonna- I wanna check
exactly why this was sold at that price, and I
wanna see if this was sold after that one, okay? So I’m gonna go back and I’m gonna go and check my search subdivision sales. That’s gonna give me
the latest, latest sold in that specific subdivision, okay? So this also allows me, if I want to compare my
square footage, okay? I’m looking at 2-1 at 1,884 sq. ft. So if I go back, without even looking, if I can just go back and compare it, and I see that this one
is an even smaller size. But he’s got 2-2, but it was
sold recent, recent, recent, for $247, so that’s the
last sold in the area. That gives me, that gives me
something to look at as a comp. Okay, if I look at the photos,
that’s the way it looks. Something to compare to. Okay, it’s a small 2-2, same subdivision, nothing… nothing too
much special with it. $247 was sold, and I
have a $280 afterwards. This is probably led to something. And I have a $280 that was sold that was only assessed for
$181, and that was a $280 one. That was sold. And this is 1,200 sq.ft approximately, so, nothing really- not much different from the one we are speculating about. Almost the same square footage. One bedroom less, but look at that. It’s on the road and I like it. So what I will do with this
case, I would first of all, since there is so much equity, I don’t need to be so much cautious with my value at this point. So even if I go the lowest,
okay, let’s say I think that let’s see- what did
that $185 one bought it. Some company bought it
and made a good deal, they bought it about a year ago for $185. It’s a 3-1, which is fine. And I guess they had to do the roof. They had to do a lot of renovations there. But what I’m trying to say is even if you go to this property and
see it’s smaller in size, it’s still selling for $247. And you go to this property and you see this is also one
bedroom more, and one bath, but it’s selling for $280! Okay? And then you see the $290
and $250 and $260 and $230, and 2, 2, 2, 2, 2, and if
you go back to $205 again $205, thousand square feet in 2017. Okay, so no matter what, no
matter what this house to me, okay, their own case scenario
would be okay, no $260, but make it $225 or $220, okay? How is that? That’s what it should
be market price today. Of course, before I’m gonna make an offer, I’m gonna check that- I’m gonna check the MLS, I’m gonna check to see how many active in
the community, you know? My deal can create so much
more equity than the $220 I’m just mentioning here. But that’s my safety net. So on my $220, if I
will go with 70/30 hold, I would probably offer,
if the guy owes $88,000, it depends on how much
money you wanna make, okay? But I could probably go
up to $140 and $150 here. If the house is in decent
condition and I can bring it up to a marketable condition quite quickly, and my total cost would be $150,000, and I can no doubt sell
it by at least $220, then I’m okay with that! Okay? I’m okay with that, you know! I give the homeowner about
$60,000 worth of lead money, and he gave me his position
and I sold the property, and I sold it for $220. But you know what, I never
paid the $88,000 that he owed. I leverage myself using that money, because nobody’s going to
take my house within a second. You know? I just have to pay the debt to the lender. So what I do is I use to proceeds
money, I use the proceeds. Let’s say I sold it for $250, right? Because I am making to make more money. But let’s sell it for $250
if I put $150,000 in cash, and sold it for $250. But I didn’t really put $150,000 in cash. What I did basically, is
I bought his position. I paid him, let’s say- $50,000
and he gave me the deed. And he left me with the $88,000. So if I paid $50,000 and he
left me with the bill of $88,000 what is my total cost? My total cost is $138, but
that’s not really my total cost because I’m not paying the $88,000. I’m only paying my $50,000. Why am I only paying my $50,000? Because I use the money from the proceeds, the money from the sale price,
to satisfy all the debts. So I’m leveraging myself, I’m
basically taking and using other people’s problem and
debt problem as my leverage. Hey guys, if you like this video and you want to learn more about becoming a real estate expert, please be sure to subscribe. You can also go to my
website and get your free one-hour calls. If you have any questions or comments, please be sure to make
them and I will respond as fast as I can. In the meantime- happy
investing, everybody! (upbeat music)

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