How to use Real Estate Investar to check value!

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How to use Real Estate Investar

How I secured a property at a 40% discount.

If you want to learn how to use Real Estate Investar then have a look at this. This is an example of how to use real estate investar to find great deals and secure property at less than the market rate!

It doesn’t matter what strategy you’re planning to use – I was after cashflow positive real estate –  you want to make sure you’re not paying too much. Here’s how to use Real Estate Investar to help secure a house at a 40% discount.

I was already in NZ on a property buying trip and I had a few towns in mind from previous online research on the ground inspection. In this case I didn’t need to use the Investar Search facility.

I did however want to see what investar thought of a property I’d found in the city of Wanganui.I knew that property there could be found that fit my criteria of gross yield > 9%. I could calculate an offer based on my assessment of rental and yield but what I needed to know was how much was it really worth in the bricks and mortar sense?

How to use Real Estate Investar to check property value

how to use real estate investarThere was one property available that was of interest. It appeared to be well constructed and was for sale by housing NZ. This was the department that provided national housing. So you can imaging it might have had a well lived in look.

The bonus was the vendor had no emotional attachment to the property. I could make an offer and if it was more than they wanted it would be mine.

But how much to offer? I’d crunched my numbers using the Investment Property Calculator and with the rental likely to be about $160 per week the most I could afford to offer and still live with myself was $65,000.

Now this is all very well, but I thought he property had potential for a future subdivision.

Here is an overhead image. You can see the lot is on a corner block with the house well situated towards the front,  leaving plenty of space at the rear for a possible second dwelling. With this in mind I’m thinking is there potential for some capital gain here!

How to use real estate investar

 

So What does Real Estate Investar think this property is worth?

In this case I was able to use the Valuer section of Real Estate Investar to give me a comprehensive report called a comparable market analysis. In the current Investar version for use in Australia you would use the My Valuer and My Research tools to get this information.

The CMA will give me a price estimate –

How to use real estate investar

Well that’s s lot more than $65,000. So what is this price estimate actually based on? Well it’s a number of things including the current CV or capital value, a figure based on both the land and improvement value.

Other things to consider are other recent sales in the street if possible, or within a tight radius.

Here’s an excerpt from the report –

How to use real estate investar

There are 4 recent sales in the very same street. Only 1 sale at #44 was at a price greater than the current capital value. This leads me to believe it is reasonable to expect a discount to the current capital value. I would think that a price of 75% of CV might be the general expectation based on recent sales data!

Am I going to offer $80,000?

Well – What did the investment property calculator tell me? The computer says no!

After some negotiation I was able to offer $68,000 and with a bit of haggling over conditions I had a signed contract of sale!

How to use real estate investar

 

This is well below the Real Estate Investar appraisal price and a whopping 40% discount to the current Capital Value!

Now in the end I did not go ahead with this purchase. I had to choose between several properties I had under contract. I chose another one in a different town that had a better cashflow.

If you want to know how to safely make written offers on multiple properties at the same time without worrying about getting stuck with a lemon then I’ll be writing about how I use a due diligence clause in my next article.

In the end there are plenty of fish in the sea  and with tools like the investment property calculator and Real Estate Investar you’ll be able to find more great deals if you exercise a little patience.

 

Until next time,

how to use real estate investar

How to use real estate investar

 

InvestarTrial3

2 Comments

  • Have you got the proper bank valuation on the property since you bought I would love to know how this compares to yours and investar’s appraisal

    Thank you Your website is great I will be recommending it to others

  • Another great question Ally. I haven’t got any re-valuations of my portfolio. The one time I did order a bank val was as part of my due diligence on a purchase that fell through. It cost something like $500. I haven’t been looking to re-val my portfolio to draw equity or even been lookinmg to sell so I just haven’t done it, not for the fun of it anyway.

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