Hey, diving into the real estate jungle? Cool move! Just a heads up – knowing the lingo is essential to have fun at this party. Two big players you gotta shake hands with: property value and the cash flow question. No rocket science here, just common sense – you wanna know what the the house is worth and if the place is gonna make money or not. To know the first you need to understand comping; to know the second you need to master underwriting.
Comping:
Comping refers to finding comparable homes to establish the house’s market value. The value is not determined by what you or I or anyone else “thinks” or “feels” it is worth. Which is sad because we all want our feelings to be validated. The true value is determined by what people will pay for the house. The best way to estimate that number is to find similar (aka comparable) houses – the comps. The best comps are ones that are similar size and bed/bath count and have similar amentieis. Its ideal if they have been sold recently nearby your target property. the more comparable the house is the better. if you can see What similar houses have sold for recently that gives you an idea of what you can expect people to pay for your house.
Underwriting:
underwriting refers to a full analysis of all the estimated income and expenses to determine how profitable the investment will be. it takes into account the estimated or income from rent and then subtracts all of the potential costs from , utilities, vacancies, maintenance, savings for future major repairs, and more. it is extremely important to get as reliable an estimate As possible of all of the potential costs to determine whether the investment is a good deal or not.
Grove Family Investments 
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