What Is Running Comps In Real Estate Investing?

Running comps is the short hip way of saying running comparables or in other words, comparable sales.

You need to do this on every single house your thinking about flipping. Now if you know your area, then you should have the comps running through your head already and basically know what you can offer a person.

Running comps consists of searching in a local area by zip code and seeing what stuff sold for. If you’re selling properties to investors, you need to look up all cash sales. Best to go back about 90 days.

Bringing up all cash sales will show what investors using cash, have paid for a properties in the last 90 days.

You then want to find all houses that sold cash, within a half mile of your property that match the square footage. You can go up or down about 15% or 200 sq ft.

You add up all those sales and divide by the number of sales. You now have the average for what homes are selling for cash in the area.

To get a little deeper, find out what the price per sq foot is by adding up all the prices homes sold for, and then add up all the sq footages. Divide the total from homes sold by the total for the sq footage and you’ve got what investors are paying by the square foot.

Some investors like to know this so it’s good to have the numbers there even if you don’t use them.

If your running comparables on retail sales, then the numbers are going to be a lot higher, it’s basically the same process. These numbers can be all over the place.

Retail buyers buy on emotion while investors buy according to the numbers.

I’m going to leave you with one last thing to know. It doesn’t matter how much the home is worth. What matters is what someone will pay for it.

Until next time my friend

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