It’s very important to estimate the value of a fix and flip property, so that you have a chance to get a more favorable loan when applying to a lender. There are a number of methods which real estate professionals use when attempting to attach a dollar amount to an investment property. Each of these methods works well in its own way, and there really is no right or wrong approach when using any specific method.
Whichever one works best for you is the one you should adopt and stay with.
Hire a professional
Yes, there will be a fee associated with hiring a professional who is qualified to estimate the value of your fix and flip property. However, there are some advantages to hiring a professional, including the fact that you can count on them doing a thorough job, and you can trust the results of their estimates. This is also probably the fastest way to get a reliable estimate on any real estate property you have in mind.
Estimate the value yourself
While this estimate method does away with the professional fees, it is very likely that the process will take a considerably longer. period of time than it would take a professional. You can be very thorough and very accurate as well, assuming that you really commit some time and effort to the process. However, there’s just no substitution for the speed at which a professional can accomplish the estimate, because of their superior knowledge and experience.
The rule of thumb method
Using the rule of thumb method, you can apply known evaluation and assessment metrics to any given fix and flip property to come up with a ballpark estimate. While this has the advantage of historical accuracy and relatively good speed, it suffers a bit in the area of being thorough. Since it is applying general rules of valuation, it overlooks any specific qualities associated with a given property.
Fix and flip investing with Black Wolf Capital Group
If you’re a fix and flip entrepreneur and you need capital for your next real estate project, we may be able to help you.
Contact us at Black Wolf Capital Group so we can discuss some financing options for your next business venture.