The TRUTH About Running Comps for Wholesalers

Are you tired of losing out on deals because you're running your numbers wrong? Or even worse, are you not doing any deals because you're not confident enough to make offers and you're afraid of getting the house under contract and because you're not sure if you can even move it? Look guys, I get this question all the time, and specifically I got this question from the Batch Leads Community. Shout out to Batch Leads Community, you guys are awesome. This is the question: what exactly do we need to be aware of when running comps so we can feel comfortable about our numbers? Okay, so let's talk about comps, everybody. Not the fluffy feel-good version you see on HGTV, the real deal. Because let's be honest, not knowing how to comp deals and using bad comps can kill your deal super fast. Comps are the bedrock of smart real estate decisions. All real estate investors that flip homes, fix and flippers, they look at comps to make sure they're buying the house the right price. They tell you exactly what a property is actually worth, not what you hope it's worth. And I know, I know a lot of wholesalers go out and they put out numbers and try to wholesale deals on what they hope it's worth, right? We all try to make the deals and we try to find comps that support us being able to sell it for more, but doesn't always work out like that. But here's the real thing, guys. The rules change depending on where you are, okay? All markets are different. I've been there firsthand and I've done this firsthand, and it's something a lot of investors miss. They think that there is one specific rule for every market out there. They think that the 70% formula is the key to it all, and that's not the truth. The 70% formula is when— if you guys don't know what the 70% formula is, it's when you take the ARV of a property and you multiply by 70%, and that includes all your discounts and all the stuff and the profit you want to make as an investor. And then you minus my— and then you subtract your rehab cost of $30,000, $40,000, $100,000, whatever it is, and minus your wholesale fee, and voilà, there is your buy price. Or not buy price, that's the buy price of the seller. You your buy price is higher, right? Because you actually— yours is lower, so you can have your wholesale fee included, right? But everyone thinks this is 70% formula is the key. The problem is that this rule does not work in every market. There's some markets that you need to be below the 70% rule, and there's some markets that you can be above the 70% rule. So it doesn't really make sense to live and die by this rule unless you understand where your market needs to be. And if you're in a market that people can buy higher than that formula, and you're just making 70% offers, then oof, you're missing out on a lot of deals. All right, so what do you need to do? Because again, the question is, how do I pull numbers and feel confident about making offers and what I do with my offer price? So first, you need to pull comps and get a good idea of what's going on in the area, what buyers are buying at. And you can do all this by using batch leads. I love batch leads. If you don't have batch leads, DM me and I'll send you my specific link that gets you free skip tracing. On the trial, and it's a 7-day free trial, so you can check that out. So let me show you exactly what it looks like in Batch Leads to run comps, and I'll even tell you what to do if you're in a non-disclosure state where they don't have all the data on what it sold for. I'll show you what I do, and let's just jump right into the screen recording right here. All right, everybody, so this is basically what I do when I'm running comps using Batch Leads. I'll type in the address of the property I'm looking for right up here. I can't show you like too in-depth of what I do necessarily because I'm— this is going to be on YouTube, and if I show a lot of the information that BatchLeads has, then it will flag the video because it shows too much good information. But basically what I do is I go find the property that I'm looking to wholesale or I'm looking to get comps on, and I do a radius around there and see what's on market and what's selling. And a lot of these properties, as you guys can see, are flipped. And you can see they're flipped by the pictures that are going on. And you can also filter it to say, okay, which ones have been flipped by flippers? And you can find that out by clicking on cash buyer. And then what it will do is say, hey, these were done by flippers because a cash buyer bought it and now they're listing it again. All right, so I find the property that I want and I do a quick— I quickly do this just because And you can also do this within the comparables tab within Batch Leads. I'm going to show you on this next tab, but I quickly do this just to see what houses that have been flipped are selling for in the area. Okay, and then once you click in here, you can see what they were purchased for. And if you're in a non-disclosure state and it doesn't show that, you can at least see what it was listed for and kind of guess what price they bought it for and what price they're listing it for and where they need to be at, um, for that investor. Okay, so the next thing that I do is I actually click into the property that I'm searching and it brings me to this tab, and you can go— this, this happens when you click on a property, you go to property details, you click on comparables, and within this you can, um, run comparables. It will just say— it will, according to this filter, it will tell you, hey, these are all the properties around here that meet this criteria. So it— again, you have to know your market. We're going to be going into that because this, it comes preset with these filters. It says within 10 years, built within 10 years. In Utah, in my specific market, they don't really care about that. Uh, they don't really care if it's built within 10 years, 15 years. Look, I changed to 30 and look at all the ones that are available, right? Like that pop up. And within square footage, like, yeah, that's important, but you know, not always, right? Location in some areas is more important than, um, year built and size. This is not always, but again, in Utah it's a little different, right? People, um, want location a lot because it's— there's not that much. We're in a valley, right? So there's They say that we're landlocked. There's not many, much more places to build in these, these areas that are populated. If you look out, we're in between two, uh, oh my gosh, that's very far. But anyway, we're, we're between two big mountain ranges, right? So you can go here and then if you go out just a little bit more, here's the other mountain range, right? So that's why like location is so important because there's not much really else you can build out. Um, now of course you can always build, but anyway, I'm, I digress. I'm getting too much into it. All I'm saying is you have to understand your market. And this is how I'm able to run comps quickly using batch leads. I just look, I bam, I go boom. Okay. What's, what's listed and what's, um, what's been flipped. And then I go in here and look at this and I go into the extra details on like what it was listed for, what's the last it was sold for. Again, if you are in a non-disclosure state, uh, like Utah, they're not going to give you sold data unless you're a real estate agent and you have access to the MLS and no, no software can get that unless they, um, Yeah, unless you're a real estate agent in, in the area. Okay. So that once I do that, guys, that is how I get a good idea of what a property is worth. And on my next video, I'll dive deeper on exactly like the step-by-steps on how to comp it. But really, like, it's, it's a quick glance. It's more of a quick glance to understand like what the values are worth in the area, the ARV, but it's not a perfect sign. So although BatchLeads is solid and a great tool to use, software alone isn't going to save you if you don't know and understand your market. That you're in. Case in point, Utah, like I just explained, where I do a lot of business, things are relatively flexible there. All right, you can find tons of deals that work even if they're not hitting the perfect 70% ARV that most lenders obsess over. And by the way, in Utah, a lot of the times it's like 85% of ARV, 89%. Again, that's why we don't just live and die by that rule. But we go to Richmond, Virginia, where I'm just doing a deal right now, and it's a whole different ball game. Everybody suddenly, when I get there, everybody— and by the way, when I say suddenly, it's because I'm— I live in Canada, but I'm doing real estate virtually. But suddenly when I go there and try and dispo a deal, everybody's fixated on the 70% rule. Everybody's like, oh my gosh, like it's got to be there. Miss it by a hair and you have a deal that's dead in the water to most buyers. Now, of course, there are some buy and hold investors that are willing to pay a little bit more, but usually they're harder to find since they're not always buying. And buy and flippers are always looking for that next deal. So why is there such a big difference in markets, guys? Like, why is there such a big difference on like what someone will pay in one market and one in another? And it's very simple— local market dynamics. Okay, let me say it again, it's simple— local market dynamics. What does that mean? Means lenders, competition, investors, appetite, it all plays a role. Richmond might have tighter lending standards, or maybe the markets just are more competitive. Whatever the reason, you need to know the rules of the game before you play. So Batch Leads is great for crunching those numbers. It's good to have a good idea, but it doesn't replace boots on the ground and research. Talking to local real estate agents, investors, hard money lenders is going to get you the inside scoop. It's going to tell you what the trends are, what are the lenders looking for. That's the stuff you don't find in any software because it's all over the place, right? And some lenders are more aggressive, some aren't. Some buyers are more aggressive, some aren't. So if you can talk to real estate investors in the area, it's going to help you the most, in my opinion. Bottom line, real estate is local. It's hyper-local. So don't make assumptions. Do your homework and understand the specific markets you're dealing and adjust your strategy accordingly. That's how you win in this business, everybody. So if you're sitting there and you're like, oh my gosh, Nate, so you didn't really help me feel more comfortable with my numbers. I'm going to tell you again, just again, just so you feel comfortable and you understand, doing the research and looking at the deals on batch leads and running comps, it's good. It should be done and it's necessary. But you cannot neglect talking to real estate investors. You have to talk to real estate investors, flippers, local title companies. You have to talk to hard money lenders. You got to get in the game. You got to get inside. You got to start talking to people because they're going to give you the information you need to feel confident. So I'm telling you right now, run your numbers, use batch leads, okay? Pull your list and start targeting and talking to people. But when you come across that seller that wants to sell, you need to be able to talk to a buyer that's local. You need to be able to talk to the title company. You need to be able to reach out to hard money lenders. Again, I'm saying this again because it's so important, and they can help you. All right, that's why I call it the Painless Flipping Method, because I've been doing this business for 6, 7 years and I still need to talk to local investors, especially since I'm doing this virtually all over and I don't live in those areas. Talking to those experts in the area, they're going to tell you exactly where you need to be. In this Richmond, Virginia deal that I have, I, I did it exactly according to what the numbers made sense to me and for it to be a deal. And then I told the seller, I set the right expectation saying, hey, this is where it makes sense for me to buy it at. You want a little bit more money than that, but I think I might be able to make that work. But let me get some of my buyers in there. Let me go in there and do our due diligence, and we can verify if we can make this work. So I set the expectations with the seller that I think I can make it work, but I'm not sure since he wanted a little bit more than I needed to be at. I'm dispoing it now. The seller has full understanding, expectations of what I'm doing. As soon as I'm displaying this deal, I'm getting a lot of feedback telling me, whoa, dude, you're way too high. That's okay. I didn't promise the seller I was going to buy the house at the price that I said. I said, I think I can do it. I need to get some people through there. I need to go and verify. Now the— it's easy because if I go back to the seller and say, hey, look, I was— I thought I could do it, but according to the information that I have, I'm a little off and this is where I need to be. It's all about the expectations you set with the seller. So if you tell a seller like, yes, I can do that, and you've like promised and make all these promises that you don't know you can keep, that's wrong. It's all about setting the right expectations with the seller, letting them know how you're going to do the business, how you're going to wholesale it. That's how I roll. But anyway, we're not getting into my strategy and how I work with buyers and sellers. It's completely different because I let them know, yes, I can do it 100% if I get the right deal, or if I can't, I'm not sure, I tell them I'm not sure, but let me check. Pretty much it's It's a better process and it sounds smoother than that, but I'm just letting you know, basically, that's, that's how you do it if you're not sure. Okay, so don't feel like you need to know 100% because you never really know 100% unless you get it at such a big discount, like 50% of Zillow or 50% of ARV and then minus repairs, like you get it, got it so low. But even in certain markets, 50% of ARV doesn't even work because some markets you need to be way lower than that. Anyway, Again, I digress. I'm just yapping. Do what I said. Talk to local real estate agents, investors, hard money lenders. Use batch leads, and you're going to feel way more confident, especially if you're on the ground. And not even like literally on the ground, like I'm not literally in any of these areas, but I'm talking like you're going to feel more legit as you talk to people that are in the business and doing it where you're trying to do a deal. So let's— we're going to end from there, guys. What markets are you guys focusing on? I want you to hit the comments. I read these. Let's talk shop. And if you found this information useful, subscribe. I'm gonna always make sure I come to you guys with the real strategies that actually work and forget about all the fluff and the BS. You guys are gonna get the real deal from me because again, I don't want to waste your time.