Transcription
Your fix and flip buyers are buying. Your buy and hold buyers are buying. Your retail buyers are buying. Everybody is buying. Hedge funds are buying. Everyone wants a home. Where's all the money coming from? How come so many people can offer cash? What is going on? How did all of these people become cash buyers just overnight?
What's cracking, YouTube? Jamil Dami here and we have a treat for you today because I got the video that popped off my entire YouTube career. The one that you all keep coming back to every single flipping year like there's nothing else that I know how to do well, but it's comp like a pro 2026. And friends, we've got so many different things to talk about in this video. So, if you're a fan of my comping videos, this is going to be the one that you want to send to your friends, send to your team, teach your people on. I don't know how many folks I have trained how to comp, but this one is super timely. So, make sure you watch the entire video because there's going to be little nuances, little tips, little tricks, little things that you need to know in order for you to comp like a pro in 2026. Let's get it, crackers.
All right. So, lots has happened in the real estate market and it has not been the same for quite some time since 2022 of July when interest rates skyrocketed and demand started to trickle down. We've had ups and downs and all kinds of starts and stops and so much chocolate. I call it chocolate cuz it's crap. So much crap in the housing market. And it hasn't been easy. It hasn't been easy for a lot of people. It has been terribly hard for real estate agents. Did you know that 70% of real estate agents didn't sell a single property last year? 70%. Meanwhile, wholesalers, creative finance investors, buy and hold investors have been pivoting. They've been doing the things necessary in order for them to stay alive.
Now, if you are brand new in the business of real estate, if you are just learning wholesaling, you're just learning creative finance, this is one of the most important videos that you'll ever watch because it's going to teach you how to value property. Now, why is it important to learn how to value property? Well, I'll tell you this. The only reason that I popped off on YouTube, the only reason why my company Keegley became a nationally franchised wholesale operation, which I just recently exited, the only reason why I became so damn popular was because the one skill that I know that I have better than anyone else is I know how to value property. I know how to value property in its as-is condition. I know how to value property in its after repaired condition. And in the end of this video, you will hopefully know how to do those things as well. So like this video right now, subscribe to this channel because it's good karma. And let's talk a little bit about what's been going on in the market.
Now, I want you to understand something that in 2026, we don't have a national home market. We don't have a national real estate market. It doesn't exist anymore. It's gone. It's gone. We've got regional real estate markets. All right? And these real estate regional markets have been changing. They've been staying neutral. Some are in buyers markets. Some are sellers markets. Some are neutral markets. And so you're going to really need to understand if the market that you're in is a buyer market, a sellers market, or a neutral market because it's going to highly create your opportunity, your potential, and it should guide where your ARV is going to land. And so let's first talk about the different kinds of markets.
All right, there's a buyer market where there is not a lot of buying demand, right? It means the buyers own the market. The buyers get to dictate. They get to walk around and say, "Listen, seller, your house has been sitting on the market for 90 days. You ain't got an offer. Your real estate agent is dusty. There's terrible pictures on this thing. Nobody's giving you an offer. I'm the only person who's going to buy your house, and this is how much I'm going to give you for it." And that is a buyer's market when you get to call the shot. So, and the buyers get to call the shots. And typically, we're in a buyer market when we have over 6 months worth of inventory on the MLS. Okay? Remember that over 6 months worth of inventory.
Now, the opposite of a buyer market is a seller's market. This is where inventory is hot. Seller puts a property on the market, seller gets an offer right away, sometimes over list, and boom, it's sold. And you guys can probably remember what this felt like if you've been in the game for some time. Between 2020 and June of 2022 when the market started to shift, we were in a sellers market and it was wild. Wholesalers made all kinds of money in a sellers market because your fix and flip buyers are buying, your buy and hold buyers are buying, your retail buyers are buying, everybody is buying, hedge funds are buying, everyone wants a home. It feels like where's all the money coming from? How come so many people can offer cash? What is going on? How did all of these people become cash buyers just overnight? And that's what it feels like in a sellers market. And typically in a sellers market, you have three to five months worth of inventory on the market, but usually it's less than 3 months worth of inventory on the market. It's just super hot. There's no inventory, lots of demand.
And then you have a neutral market, right? A neutral market is where you've got even buyers, even sellers. They're not fighting. You don't have things going over list price. Now, in a neutral market, price has to be right. Right. Price has to be right. And your buyers, they're going to be able to choose, but they're not going to have the world to choose from. And your sellers are going to be able to list a property and get a good price, but they're not going to get silly numbers like 100K over asking like we saw in the really hot times of the sellers markets, right? And so, first and foremost, you need to find out where you're operating, whether it's a buyer market, a neutral market, or a sellers market. And I'm going to give you some examples of some markets that still have these conditions, right? There's still some really hot markets in the US right now. There's places that you can write an offer on a property and it's going to go like that property, it's got demand still. I was surprised. But while I've been on the Creative Nation tour, I've been finding out that there's still some really, really hot real estate markets in the US.
Now, some of these hot markets are in markets that you probably hadn't really paid attention to, like Hartford, Connecticut. Hartford, Connecticut. It's one of the hottest markets right now in the United States. Like, believe it or not, it really is. Upstate New York. Like, upstate New York is hot, hot, hot right now. Never. Who the hell wants to live in upstate New York? But it's a sellers market up there and people put a property on the MLS. It's going to get an offer, right? Providence, Rhode Island. Oh my goodness. Really? Like never expected it. Now, there's some markets or some real estate markets that are going to be hot. And you know, Los Angeles, it's still on the list. Boston, it's still on the list. Places like this. These are what you called high appreciation, high demand markets. Okay? In a market like that, a high appreciation, high demand market, you're always going to have high demand. You're still going to have appreciation year-over-year. Even though the market has its conditions, prices start to, you know, hover. You start to see interest rates spike. You start to see buying activity start to creep down. In these high appreciation, high demand markets, buyer demand is still pretty strong. All right? And so, you're not going to be able to go into markets like that and and lowball.
Now again, I'm not a fan of lowballing. I believe that as wholesalers, we should only be offering on properties that are either in distressed condition or have distressed situations attached to them so that we can have people who want to take our cash offer and trade speed for speed and convenience for price. Right? That's a trade-off. That's just like anybody who goes and trades in a car at CarMax. You know, you're not getting 100% of your car's value. you know, CarMax is going to go and up that price and put it on their lot and sell it for more money, but you choose speed and convenience, a a sure thing, and you take the deal, right? That's what wholesalers are for people who are needing speed and convenience. And for people who have distressed property where it's not in a condition for a retail buyer and it needs a lot of work, that's another place where a wholesaler can come in and add some value to the situation. Outside of that, we shouldn't be giving low offers on retail ready properties. We shouldn't be giving low offers on beautiful homes. It's just doesn't make sense. That's a low ball. And as wholesalers, we're not lowballers. We're investors. There's a big difference between those two things. So, in these markets, you're not going to be able to go and lowball or go and give an aggressive number, make a disrespectful offer. None of that's going to exist in a sellers market. In a high appreciation, high demand market that sellers that favors sellers, you're not going to be able to do that. Okay?
Now, in modest appreciation and modest demand markets, markets like Minneapolis, Minnesota, right, places in the Midwest right now, there's a lot of activity there. They're pretty steady. They're not seeing the same kinds of issues that some of the high appreciation, high demand markets that I used to invest in or that I'm normally investing in are are seeing, right? So, you need to find out, are you in a modestly appreciating, modestly demanded market? because if you are, you're going to be able to be somewhat aggressive, but you're not going to be able to be super aggressive on your offers and how that fares for you on how things comp. Remember, when you're in a buyer's market, there's a good chance that your ARV is going to come in maybe a little bit lower, that you have to bake in some buffer for your buyer. Because if you're in a buyer's market, right, where prices are starting to potentially decline, well, you're going to have to bake in contingency for your buyer. Cuz if he fixes and flips that property, goes and list it, you told him ARV is 400, now all of a sudden houses in that area are trading at 375. Well, he just lost $25,000 in value because of demand, right? Because it's a buyer market. So these are things I want you to pay attention to. What's the demand climate like in your current market? Okay, so think about that.
Now, again, we're not in a national housing market. We're in a regional market. So, this is going to require you to do some research, right? Chat GPT is your friend. Now, go ask Chad GPT, what is this market that you're working in? Like, let's just say it's Toledo, Ohio. What's Toledo, Ohio right now in real estate demand? Is Toledo, Ohio a hot real estate market or is it starting to cool? It'll give you the market data that you need to make those determinations. And then that should help you understand should you be building in buffer for your ARV. Should you be building in speculation for your ARV? Because again, in a sellers market and you're talking about a high appreciation, high demand market, when these two things come together, boy oh boy, oh boy, you find people overpay because they know there's going to be more appreciation by the time they fix and put that property on the MLS that they're going to build in equity just holding that property during the renovation. Right? So, paying attention to these things. Am I in a buyer market? Am I in a sellers market? Is it a neutral market? Am I in a high appreciation, high demand area? Am I in a modest appreciation, modest demand area? Or am I in a low appreciation, low demand market? Places like Mobile, Alabama, right? That's a low appreciation, low demand market. Housing prices don't really increase there. Even over CO, it didn't go up much, right? It's typically a market where investors enjoy cash flow. They're not investing for appreciation. Whereas in markets like Los Angeles that appreciate and that have high demand, they're not going to get any cash flow in that market, investors are banking on appreciation. So, it's super important that you understand what the conditions are, what the market conditions are, and what market type you're in. That should help guide your offers and where your ARV is going to sit. Okay? So hopefully this frames what I'm going to be talking about next cuz I'm going to be going into the appraisal rules updated for 2026. Things for you to think about, things for you to notice, how much you should be taking off for certain areas, how much you should be taking off for traffic and all the things. We're going to get into all of that stuff right now. But before we did that, this was really important for you to know. All right, I'm going to wipe this off and away we go.
All right, so I got some new stuff on here for you to look at. Now, again, these are the 2026 appraisal rules. There are some things that you want to keep in mind. If you've been watching the first comp like a pro or the last one that I did, again, right now, the age of your comp is really important right now because we're in a market that is changing. Some markets have become stale. Some have become buyers markets. Some have become sellers markets because they're hot. Those markets like Hartford, Connecticut, go figure, it's a sellers market over there, it's a hot market. And so, you have to be looking at the age of the comp.
Now, when you're talking about a market that's a buyer market or where the market is stale and like prices are starting to come down, it's really important that you don't use comps that are older than 6 months. And I would way prefer you to use comps that are 90 days, okay? Because the market is starting to steadily decline as the market declines in those buyers market areas, places like Florida, Texas, Arizona. Never would have thought that this is what's going to happen in markets like Texas and Florida and Arizona, but it's happening. I'll give you an example. I bought a home in Mville, which would have had an ARV somewhere around 430,000 when I bought the home after I did the renovation, did an incredible job, put it on the market, comp started coming in and closing at like 375, 380. Now, so I had $40,000 in diminished value there. And I didn't think about that enough because I got caught basically with my pants down in that. And I'm still holding that house now. I turned it into a rental. But go figure, right? So if I had been using comps like no older than 90 days, then I would have been safe because I would have seen, oh crap, something just closed at 390. Hm, that's a big drop. Maybe I need to lower my ARV. And I could have lowered my ARV down to 375. Then I would have been able to make a more aggressive offer. I probably would have passed on that house because the wholesaler wasn't going to give me maybe a better price on it. Maybe they would have, maybe they wouldn't, but at least I wouldn't be sitting on a rental right now that I don't really want to be sitting on. You know what I mean?
So, 90 days though, how do you know if a market's starting to get stale? Check days on market. Okay? If actives are sitting for like 90 days or longer, decrease your ARVs by 5%. If actives are sitting on the market for days on market for 90 days or more, decrease your ARV by 5%. Really important that you do that.
The next thing is look at pendings. Okay, pendings. Pendings will tell you where the market is trending. It's a easy rhyme to remember. Pendings equal trending. Now, just because something is pending at a number doesn't mean that it's under contract at that number. So, you're going to need to do some more investigation. How many days on market was it before it went pending? See, if something's sitting on the market, been on the market for 110 days, and then it's pending at 400 grand, do you think it's under contract at 400 grand? Not likely, right? It's probably under contract at like 320 or 300. So, call the agent. Call the agent. Now, what I'll do is I'll call an agent. I'll say, "Hey, you've got a house that is under contract right now. It looks to be pending. It's showing 400 grand. I'm going to be doing a project in the area. I'm thinking I might even want to hire you or or interview you to be my potential listing agent. Are you able to share with me what the contract price is for the new pending deal that you've got? Because I want to know if I'm making an aggressive enough offer on this home. And they will typically tell you. Now, some agents won't. Some can't disclose. Don't badger them. If they say, "I'm not allowed to tell you." Fine. They're not allowed to tell you. But call enough of the pendings in the area to get an understanding of where things are trending. Okay? You can also assume that if something's been sitting on the market for like longer than 60 days and then it goes pending that the pending price or the price that's showing as the listed price on the MLS and the contract price are not the same. It's a very good chance that the contract price is at least 10 maybe even 20% lower than what the listing price is. So make educated inferences. Something's sitting on the market 90 days and it goes pending. I guarantee you it's not at that price. And I have it wholesalers send me pendings all the time and they're like, "Yeah, it's there's got this one pending at 450." I'll call the agent and find out that it's under contract at like 360. So, there's a huge gap, right? So, pendings don't tell you the entire story. You got to look a little further. So, days on market and pendings will give you the temperature of the market currently. They'll help you in speaking to your buyer. So, when you're talking to your buyer about the potential of your deal, about what they could potentially exit for, you can speak educatedly to say, "Hey, look, I noticed also actives. They're not sitting on the market very long. Actives are sitting for like 30 days. So, this is a pretty hot part of the market. I think you'll do really well here. Also looked at pendings. Things are going pending in like 10 days or 20 days or less. That's a sign of activity. That's not a sign of distress. That means that you're probably inching in more of a buyer market there. So, you can get more aggressive with your sales numbers. You can get aggressive with your offers. You can offer more money to sellers because there's more heat in that market. Okay? I hope this is starting to connect the dots for you.
Now, of course, the same rules apply, right? When we're comparing homes, we want to make sure that when you're comparing two properties to find a potential comparable that you stay in the same subdivision. Now, how do you know if you're in the same subdivision? Don't cross any major roads. Now, I'm going to do some comps for you guys in this video a little bit after and I'm going to show you how I'm using Zillow. It's a free tool and I'm going to point out what a major road is, right? It's a thick yellow line. And whether you're using Deal Sauce, Zillow, Prop Wire, PropStream, I don't give a crap what you're using to comp, but whatever you're using, the reason I use I actually love Deal Sauce. It's my own company, but I'm going to show you on Zillow. So for all you guys with no budgets, you can't say to me, "Oh, Jamil just wanted me to buy his software and that's why he made this video for me because he buy software." No, I'm using Zillow so you have something free to use and then when you can make some money, then buy my software. Okay? So anyhow, same subdivision. Don't cross any major roads.
Now, if you have to leave the subdivision because all the comps in the area are old, I would way rather you leave the subdivision and get a more recent comp. So, it's better to travel over distance than over time. Especially in a buyer's market, okay? In a buyer's market where things are starting to decline, demand is declining, you want the most recent comp possible. Now, in a sellers market, it's not as important because if it's a sellers market, prices are going up. And so, if you use a comp and it's 6 months old, well, the only place the market is going is up. So, this comp is valid because prices are going up. So then you don't have to travel over distance and you can even go over time and stay closer to where your subject property is because the market is increasing. So the hotter the market, the closer you want to stay. Okay? The hotter the market, the closer you want to stay and the farther out in time you can go. The cooler the market, the farther out you can go and the closer you want to stay in time. Okay? Make those connections.
Now, you only want to compare properties that are plus or minus 10% in property size. Let me give you an example. So, if I have a 1,000 ft home, I can only look at comps plus or minus 10%, right? So, I can only look at comps around 900 square ft or 1,100 square ft for a max for a high. And then I can use the dollar per square foot in order to extrapolate value. I can use dollar per square foot if I'm going plus or - 10%. Here's where it gets mixed up. Real estate agents love to send you a comp for the smallest house in the neighborhood when they're trying to sell you the largest house in the neighborhood. And they'll say, "You just take the dollar per square foot for this house. It's $1,000 a square foot, and you multiply it by the size of this house, this biggest house in the neighborhood, and they want you to extrapolate using that value." That's where the mental gymnastics of the real estate agent becomes, I think, almost criminally fraudulent because they know that that's not how it works. You can only use a dollar per square foot comparison method if it's plus or minus 10% of the same size of your subject. So again, if my subject property is 5,000 ft², I can only go up to 5,500 ft² and I can only go below to about 4,500 ft² when I am comparing them. Okay, so plus or minus 10%. Beyond that, the comp gets less valid and less accurate. So try to stay within plus or minus 10%.
Again, you only want to compare properties that are the same property type. So if you have a single-story rancher, only find comps that are single-story ranchers. Okay? Now, in the single-story world, I've seen this happen a lot where someone will send me a mid-century modern comp for a single-story ranch, and they'll justify value with a mid-century modern comp. You can't do that. You can only compare a mid-century modern to another mid-century modern. You can only compare a ranch to another ranch. You can only compare a colonial to another colonial. You can only compare a two-story to another two-story. You can't mix and match. If you start mixing and matching, your accuracy gets less and less and less. Okay? Now, I'm not telling you that it's never done. But what I'm telling you is it's not done in an accurate fashion. And and appraisers will always use a property that's similar to the subject, then help paint another picture of value by using a property that's inappropriate. Right? So, if there's a high value two-story, but you've got a single-story ranch, they're not going to use this two-story to justify your higher ARV because you want it that way. The appraisers are there to protect the lender. The appraisers's job is to try to be as conservative as possible so the lender's not making bad loans. So, they're not trying to justify a pie in the sky value for you. So it's really important that you make these comparisons very very similar so that your values stay the same. Okay? So that they actually become relatable and comparable, usable.
Now if you're going to go out in distance from where your subject property is, you can go out to about a half a mile. Although if the neighborhood changes, then it's not valid. I'm going to give you an example. Okay? I live in a neighborhood in Arizona called Arcadia. So Thomas is a southern border for that neighborhood. Once I cross Thomas, they smoke crack. I'm not joking. Like there's crackheads. Literally, there's a crack house like just down the road over there. And I'm staying in this I live in this area with five $6 million homes, but there's crackheads like just down the street. Now that is way less than a half a mile away. So, if there's a property over here where the crackheads live and they want to try to justify value by my million-doll uh mansions over here, it's not going to work. The neighborhood changes significantly. So, just I say half a mile doesn't mean it's half a mile no matter what. Look at the roofs. Look at the properties. Look at the neighborhood. Take time to use Google Street View and walk up and down the streets and look at the houses. Do these neighborhoods look the same? Am I in a similar subdivision? Like, are the streets the same? Are the houses looking the same? Do the cars on the street look the same? If you are changing dramatically, like this neighborhood over here looks like it's in the hills and this neighborhood over here is on in on the base of the hill, they're not the same, even if it's only a half a mile apart, right? So, pay attention to that. It's always like for like for like when we're comparing things. It's like comparing apples to apples, but it's not just apples to apples because we know there's all kinds of apples, right? There's Granny Smith apples, there's Macintosh apples, there's red apples, there's Gayla apples, there's crab apples. There's so many types of apples, but they even get more defined than that. What about apples grown in different orchards? What about apples grown in different seasons? What about apples grown in different farmers, right? Different climates. So, it's got to be the same apple that's the same species grown in the same orchard by the same farmer at the same time of year. And everything that changes makes the value less accurate. Okay.
Now, again, if you have to go if you have to go out more than a half a mile, that's only in a buyer's market when prices are starting to decline. And you can go out to find a newer comp, but only if it's in the similar area with a similar demographic. Okay? Similar area, similar demographic. So, working-class, working-class. If you go to a luxury market and your property is in a working-class area, it's not the same. I was on a coaching call yesterday where somebody was looking at an 8-plex and the property that they were looking at was in a really working-class area of the city. And about I don't know a mile away was another 8-plex that they were using for a comp. And this 8-plex was selling for like $3.5 million. And they were like, "Oh, my 8-plex is going to be worth $3.5 million." And no, it ain't. You're in a working-class area over here. And then we started unpacking what similar 8-plexes were selling for, and it was like 1.8. So she went from like 3.5 to 1.8 in a mile. That's how much things can change in a mile. When the demographic changes, the neighborhood changes, the values change. Okay, so now that we know these things, right, we got to make some adjustments because you're not always going to have the same number of bedrooms and bathrooms. You're not going to have the same landscaping. You're not going to have a pool. Some will have a pool, some won't have a pool. So, you need to know what those adjustments are. Okay.
Now, we have made some some attunements here because the a bedroom I've seen now come up to at up to 25 grand in value. So, an extra bed could be worth plus or minus 10 to $25,000. An extra bath could be worth plus or minus $10,000. A pool can be plus or minus 10 to $25,000. So, here's a place where real estate agents really like to play uh gymnastics fraud with their values again. So they'll tell you, "Oh my god, my seller, he spent 300 grand on this backyard and pool." It's like, and they think that the seller is going to get 300 grand for that backyard and pool. That's not how it works, baby. If they spend 300 grand in the backyard and pool, that's a sunken cost. That's his problem. An appraiser is only going to give me 25 grand in value in that. Now, I have seen in certain luxury areas, this is for markets in the 500k or less. Okay? Now, when you get into 500K or more, so luxury, okay? And I would even say million dollar plus, million plus, you can have pools get worth 25 upwards of $100,000. So, in super luxury areas, right, where you're now talking in the millions, a pool and landscaping can go from 25,000 up to 100 grand. But in the 500k or less, you're looking at about 10 to 25K. A garage, again, 10 to 25K. And that's depending on climate, climate, and price point. So, if you're in a 500K or less, then you're typically going to be around 10 grand for a garage. But if you're in a hot or a cold climate, it can be worth 25. Like in Phoenix, Arizona, a garage is worth about 25 grand. In Minneapolis, Minnesota, a garage is worth 25 grand. Why? It's cold as hell out there in Phoenix. It's hot as hell out there, right? So, a garage is pretty important. Now, if you're in a neighborhood, if you're in an area where parking's not super important because climate's pretty steady, well, a garage is not going to be as valuable. Okay? So, keep that in mind. A carport plus or minus 5 to 10 grand. Again, depending on climate and price point. So, a carport might be worth five grand in a working-class area up to around 500 grand. Once you get between 500K to a million, it could be worth around 10,000 bucks. Okay, so now these are the things you want to keep in mind for adjustments. Next, we're going to be looking at how commercial properties, how multifamily properties, and how traffic, where your property is situated, can change value.
All right, we're back. And now we're going to look at the effects of traffic, multifamily, and commercial properties surrounding, fronting, siding, or backing your subject house. Now price point here is important. 600K and below. Now it used to be where properties up to $500,000 were considered starter. Now it's $600,000 with you know values having gone up as much as they have. And so luxury is now around 600k and beyond. and non-luxury is 600k and below. So if you are subject property, okay, is siding, backing or fronting, traffic, multifamily or commercial, these are the adjustments you need to make. Siding, so it's on the side of your subject property. Let's just say it's a busy road on the side of it. Here's your home. There it is right on the side. You're going to lose about $15,000. If you're backing traffic, multifamily or commercial, you're going to take off $20,000. If you're fronting traffic, multifamily or commercial, you're going to take off $30,000.
Now, it changes dramatically when you're in the luxury price point because if you're siding traffic, multifamily or commercial, you'll take off 15%. If you're backing traffic, multifamily or commercial, you'll take off 20%. And if you're fronting traffic, multifamily or commercial, you'll take off 25 to 30% in value. Guys, I'm telling you, you want to know who the guy's not supposed to be living in a neighborhood who's living in a neighborhood is not supposed to be living in a neighborhood. The guy who's not really supposed to be able to afford to live there, but he's living there. Maybe the guy who's running a Ponzi scheme and everybody else in the neighborhood is like real business people. Okay, that guy usually lives on the major street, okay? on that fronting road cuz he paid 25 to 30% less. And real estate agents love to send you a comp. They will, oh my god, it's so infuriating. They will send you a house in the same subdivision, same neighborhood. Sometimes it's even a model match, and it'll be on an interior street, quiet road, one street over from the traffic. And they'll say, "That's your comp, Jal." No, it ain't because the subject house that you're trying to sell me is fronting a major road or it's backing a freeway or it's siding and fronting a major road. So, make sure you don't get caught. I have seen so many people get lost losing hundreds of thousands of dollars because of this one scam. And it's the agents doing it. It's the agents doing it because they're not letting people know that these parameters really do change the value. And y'all know this agents, you know what I'm talking about is real here.
Now, basements, guest houses, and ADUs or DADUs, we can't use the square footage in a basement for the totality of the square footage because appraisers can only use above-grade square footage. Now, if you have a basement that's developed, okay, when I say developed, it needs to be developed to the same level of construction as the main house. So, if they use the same materials in the basement that they use in the upstairs, some appraisers will give you 50% of value. So, let's just say your basement's 1,000 square feet and it's been constructed to the same quality as the upstairs. Some appraisers will give you 500 square ft in value. Some will give you none. So, don't count on it. If you are writing an offer on a home that has an unfinished basement, don't count on your investor getting value for the basement square footage if they finish it. If your real estate agent is trying to sell you a home that's in original condition and it has a somewhat of a developed basement, I've seen this happen in markets like Minnesota. In Minneapolis, they love basements. So, they typically have the same size square footage in the below grade as they have above grade. So if you got a 1,000 ft main home, they typically have another 1,000 ft² in the basement. So for a total of 2,000. Now an appraiser is not going to count that as 2,000. They only count it as one. So if that square footage is not developed to the same standard, it's not even usable.
Guest houses are the exact same. Guest houses have to be completed to the same level of construction as the main home and then it's up to an appraiser's discretion to give you 50% of square footage value. So, if I have a 500 ft guest house and it's completely decked out, I might get 250 ft of value. Okay? So, make sure you know that. And when you're talking to your buyers, you can articulate this and they will know you know what you're talking about because they'll have gone through this. I went through this as a flipper. I bought a house with a guest house and I finished the guest house and then I added that square footage to my main property and I put it on the market and then somebody bought it and then an appraiser came and they knocked off hundreds of square foot of value cuz they were like your guest house can't be used. How come nobody told me that? Well, your agent should have known.
ADUs and DADUs are all the rage right now in 2025 and 2026 because these uh you know millennials like to live at home and um so now parents are building out guest houses in the backyards. Also we have a housing crisis and so people are building ADUs and renting them out to minimize their impacts of the housing costs. I love an ADU. Okay, agents, they will sell you on the fact that an ADU is permissible, but there won't be an ADU in the backyard. You go tell that agent, "No ADU, no value." Okay? I ain't paying for what is potentially available. That's not there. It's not realized equity yet. That's not realized value yet. I have to be the one to build the ADU. I'm going to be the one that exercises the value. You don't tell me you can put an ADU here, so we're charging an extra $25,000 for this because that's not how it works, lady. Okay? No ADU, no value. Now, if the ADU has its own parcel, or if the agent is telling you, you can put an ADU in the backyard and we've already got its own parcel number, now there's value because now that's sellable. You can split it off and sell it as its own thing. Okay? So only if it's got its own parcel number and it's constructed, then it has 100% of square footage value. Now, if it's got a parcel number and it hasn't been built yet, it's got 10% of its square footage value. 10% of its square footage value if it has its own parcel.
All right, guys. These are the rules. Now, what I'm going to do is I'm going to get three properties and we're going to go into Zillow and I'm going to comp those properties and I'm going to show you how I'm using these rules to determine what my values are. Let's go.
Okay, so we are using the free Zillow website to comp some properties. Of course, I am a big proponent of investing in your business. And if you want to use a better platform that will actually give you access to pictures and that way you can see has the house been renovated and can I see the inside? See when I'm using Zillow I could I have to make an inference just based off of the appearance of the front of the home. But use Deal Sauce if you want to spend some money and use a really really good comping platform. It's going to be much like the one we use here but it'll have access to pictures. It's got MLS data in it. So, if you're in non-disclosure states like Texas, you'll be able to pull up data. Um, but for now, because I'm assuming that some of you guys don't have a budget and you just want to do this for free, we're going to use Zillow. Okay? So, you go to zillow.com and I'm going to look at my first address here. Uh, 7537 West Osborne Road. Now, this is a deal that a wholesaler sent to me for $260,000. They say the ARV on this is $450 grand. This is on the MLS for 290K. So, they found an MLS deal. I'm I'm all for MLS deals. I just don't know if this is going to make any sense, right? We got a 4 bed, two bath, 1584 sq ft home. Now, Osborne is a major street. It's a busy road, okay? So, I have to make a consideration for that. Also, this is a two-story. We've got stairs in this house, so I have to make consideration for that. Now, looking at the photos, this house definitely needs a remodel. Look at it. We got you walk in the front door, there's stairs up there, there's stairs down here. And you think these guys would have like cleaned up a little bit for the listing agent to come and take pictures of their house? Not a fripping chance. These guys were like, "No, no, no, no, no. In fact, throw some more stuff on the floor so house looks really, really good for our future buyer." Amazing. You think the real estate agent might have done a little bit of and spanning themselves? No. No chance. Anyhow, we've got a whole bunch of different types of flooring in here. Look, you got one flooring over here. You come up, there's laminate flooring right over there in the kitchen. There's more flooring. I don't know if this is tile or no tile. Another type of tile here in the living room. And then, oh my god, and one bedroom's got another kind of tile in here. And then, oh, look at this. Another bedroom's got another kind of laminate flooring in here. There's like 10 different kinds of flooring in this house. This house, this bathroom doesn't even have flooring on there. They were just pissing right on the plywood. Um, so this is perfect. This is exactly the kind of wholesale deal that we would want to do. Let's look at the numbers. So, they list it at 290. It's a 4 bed, two bath, 1584 square foot home. I'm going to It's built in '73. I'm going to close this right here. I'm going to go into the map now. I'm going to go sold and I'm also going to There we go. I I toggle this. I can see, show me stuff in the last 24, 12, 6 months or 90 days. Now, again, Phoenix is a buyer market right now, right? So, the buyers are in control, which means the prices are going down. So, I'm not going to want to look at comps that are older than 90 days. So, then I just go to my little plus arrow right here, and I go zoom, zoom, zoom, zoom, zoom. And here we go. Now, I'm in my little area. This would probably be the box I want to stay inside of for my comps, okay? Cuz Indian School will be my north boundary. 83rd Ave will be my western boundary. Thomas Road will be my southern boundary. And 75th Avenue will be my eastern boundary. Osborne, I'm on Osborne here. So, let's start with some of the higher numbers, right? Look at Let's look at this 380. So, this is a 42780 sq ft home with a pool. So, we don't have a pool. We're 1,400 and or we're 1500ish square feet. So, not the same. Uh, let's see if I can see interior pics of this house. There are some Let's see. So, it's got some upgraded flooring in here. Not like super remodeled, but not like gross, right? You can see the kitchen's got some upgrades in it. So, not a comp. And we definitely don't have a 450. Oh my god. Like where are some of these wholesalers getting their ARVs? When and on what planet would this have been worth 450 grand, right? Like I'm just curious as to where they even got the number from. Anyhow, so we know we're not 380. Let's check 350. Ah, okay. Four bed, two bath, 1272 11325. So now this is a B level also has stairs fully remodeled. I like it. There we go. Our stairs up, our stairs down. This is probably going to be the closest we've got for a viable comp. Now, this is a 4 bed, two bath 1272. Let's go back to our subject, which is a 4 bed, two bath, 1584. So, that's 1272. So, let's do the numbers for the dollar per square foot of that. Okay, so we had 350 and it's right on Osborne. I love that. Okay. So, 350,000 divided by 1272. Okay. That's $275 a foot. Now, what's the difference between I want to see if that's a viable comp for us to use. Okay. So, we've got 15.84 and that's 1272. So, so it's about 80%. Okay. So, it's on the line. I could possibly use the dollar per square foot. And I'm going to give this wholesaler the benefit of the doubt. So, we're going to say 350,000 divided by 1272. That gives us $275 a foot. Multiply that by 1584 and a 435 ARV. So, okay, he wasn't completely right. He said 450. I don't think that that's real. I think 430 is probably real. Now, we don't have parking. Ah, there we go. We got to we got to subtract for parking. So now this subject doesn't have a garage that it looks like the garage this it's got a carport. Now they could enclose that and add a garage, but it doesn't have the garage right now. So I got to take off $20,000 for the garage. So if I was at $435, now I got to take off 20,000 for no garage. And that gets me to a 415 ARV. So, he marketed as a 450 ARV. It's a 415 ARV. It's It's a bit of a stretch, but not criminal. Okay. So, you know who you are, wholesaler. If you're watching this, you you didn't like completely poop the bed, but you know, you were being a little bit cheeky, and that's that's okay. That's just this is the reason why people are like, "Wholesalers suck because they don't
think we know what we're doing, and we tend to embellish." And here's an example of an embellishment. It wasn't gross embellishment, but um you know it we could be doing better.
All right, let's look at one in Florida because Florida is a great market. Lots going on there. It's another buyer market, guys. Another buyer market, meaning the market is slowing down. You want to make sure that you're using comps that are at least at least at least at least 90 days. You know, I wouldn't want to go over six months by any means. Let's see if we can find a good one here in Florida.
Ah, okay. Here's one. I get so many deals sent to me by so many people. It's incredible. I love that. I love that part of my life. It's super super neat to be able to have like almost every wholesale deal in your text threads. Here's one. This wholesaler sent me this one in Gulfport, Florida. address is 1908 56th Street South Gulfport, Florida. Now, this wholesaler says this house is about a 350 ARV. I don't think that's the case, but I don't know. We got a two bed, one bath, 960 ft home. This was built in 1949. It's a pre-foreclosure. There's not a lot to see here. You can see there's this tiny little shack and then a tree. Let's see the street view. Let's check out what this what this little area looks like. So, I like to look at street views because it gives me an idea of like what I'm looking at. So, like this little area here, it's kind of janky, right? Like it's it's a definitely a I would call it a sea area, you know. Definitely a sea area. There's what's probably the front of the house here. Let's right here. Okay. So, that's the front of the home right there. This is the side of the home right here. Lots of vegetation. perfect wholesale opportunity cuz you can tell that whoever it is that's living here is not um doing a lot of maintenance on this house. But other than that, like the the street itself, it's not terrible. Okay, so that little back alley part, that little side street there was kind of nasty, but the front part of this neighborhood seems to be pretty cute, right? It's like a nice little workingass area. Our subject home is definitely the pimple on the block. So maybe there's something to it. Maybe this is a 350 ARV. Okay, but let's let's look.
So back to the listing. Two bed, one bath, 960 ft. Let's dive into the area and see what comps we've got. So I'm going to check and start at this 325. I mean, this is a three bed, two bath, 1230 ft. Nothing like what we've got. We're a two bed, one bath, 960 square ft. So, I've got to be below 320. So, what's below 320? Let's check at this 211. This is a two bed, one bath, thousand square footer. Let's look in there. Okay, not terrible. It's upgraded. It's a little bit larger than ours. lot is a little bit larger, but nothing to, you know, be too concerned about. Definitely an upgraded home. All right, so this is a potential, right? This this 211 is a potential. Let's Let's see what else we've got. What's this? Um 270 up here. Okay, two bed, one bath, 920 ft. So, this is actually much better of a of a comp for us to use. It's actually newer. This is in January of 2026. And you can see that this house has been really nicely renovated, right? You can tell, you can see the new shutters here. Beautifully beautiful like white here on the on the front. White new paint. This is this is a really nice property. Now, ours is a 960 footer. So, we want to extrapolate. We got 270,000 divided by 920. That's 293 a foot. Now, we want to multiply that by our 960. That gets us to about a 280 ARV. So, the wholesaler said this was a 350 ARV, not even close. It's a 280 ARV. If I have a 280 ARV, and we're in Gulfport, Florida, if I'm a renovator, I'm probably gonna want to buy this at like 50% of that. So, my strike price, my buy price would be 140 on this. 140. They're asking $200. So, the wholesaler is asking for $60,000 more than what this thing will trade for. So, that's a pass.
Now, let's take a look at one more property here. Maybe something out in California. Cali is always a really fun market to look at. All kinds of things going on there. And that is a high appreciation, high demand market that's still pretty solid. It's still a pretty hot market. So the parameters that we're going to be looking at are going to be a little bit different. We can do some more extrapolations over there. But because the pricing is, you know, in a different category, we're going to need to be mindful of of how crazy we get and what kind of speculation we'll allow ourselves to do. But, you know, again, Cali is typically a pretty robust market.
So, let's look at this. 2830 Wagon Wheel Road in Ox. Oo, this is a condo and it's unit 203. All right. So, condos are fun because condos you got to stay in the same building. Okay. Okay, so we got a three bed, two bath, 2130 square footer and it looks to be like a fourstory building built in 2021. So now I need to find a unit that is 3bed, two bath, 2130 and has similar features as this because condos are pretty you you can't really go too crazy into different buildings. I have to keep all of my comps in the same building in order for it to be viable. That's what an appraiser is going to do. So, let's look.
So, here's a three bed, three bath, 2087 square footer at 760. This is in the same building and it's unit 302. We're unit 203. Um, this looks like it has an extra bath, but square footage wise it seems pretty similar. So, it's a ours is a little bigger that has a one extra bath. So, that's a wash. I would say the size and the bath would wash each other out. And that was a $760,000 sale. Okay, let's look at this. 575. That's a two bed, two bath, 1789 square footer. So you can see we dropped jeez, we dropped like damn near 200 grand just because of a bed and a bath. So not a lot of detail on that. So I'm going to leave that one. Let's check this 673. So there we go. That tells me a lot. So this one at 575 must have not been renovated. This one at 673 has been renovated. So I know I'm larger than this. So, I have to be above 670 and I'm probably going to be pretty close to this. This bathroom is the only piece that's giving me any heartburn. But again, we are about 100 square ft larger. So, I'm going to cancel them out and I'm going to say our ARV is probably about 750 760 on this one. So, if that's my ARV, let's just say 750, I'm going to need to buy this around 70% of ARV in an in an area like Oxnard, California, right? So, my offer on this one's probably going to be about 525. 750 is my ARV. I want to be at 70% of that because it's California. 525 is going to be my offer.
So, there you guys have it. When you're looking at properties, you want to make sure, especially if you're in town homes or condos, you stay within the same area. If it's in a buyer market, you want to keep your comps within the last 90 days. If you have to extrapolate, make sure you're making adjustments for parking, make sure you're making adjustments for traffic, and beyond that, this is not all that difficult.
Now, if you want a better platform that has more data in it, more photos in it, you can go to dealsauce.io/jile. You get a twoe trial there. You can check it out. But there you go guys. Comp like a pro 2026. If you want me to bring back straight out of compin then I want you to do me a favor. Write comp in the comments. Write comp in the comments. If we get 200 people say compin in the comments. Then I'll bring back straight out of comp. And if we DON'T THEN IT'S YOUR FAULT. Make sure you like this video, subscribe to the channel, send this to a friend so you get 200 comments. I can bring back straight out of the comp. And if not I'll see you guys in 2027.