I am looking at several different properties for purchase with the intent of fixing and flipping in a year or two. I am trying to figure out which properties are under market value. I have found the city web site which posts the assessed value for the properties I am interested in, but I'm not sure how that compares to the appraisal value and how it should compare to the asking price of the property. Should the assessed value be marginally close to the asking price? I have found some that are more and some that are less. What is the best way to anticipate if a property is priced under market value?

C. B.
Denver
Colorado

Answer:

Hi C.,

Your question is usually the first question an investor asks, whether they are paying market or not. If you really need to know ask a realtor or go on realtor.com. More importantly you should ask yourself these questions:

Would I want to live in it?

Do I like the area?

What kind of cash flow would I have if I rented it out while putting 5-10% down payment. Keep in mind, today's lemon might be tomorrow's steal. I bought a foreclosure with a positive cash flow the first year and it doubled in value within 2 years. It was California property. I understand Colorado is doing very well, however I would look at which areas are appreciating or are more popular. For example, I would think that Evergreen may have hit it's peak already, and yet the areas within 30 minutes of the airport might be a good buy. Again, realtors love to give free information in hopes that they can snag you as a buyer. Finally, flipping is fine, but I like keeping properties and letting the renters pay the mortgage for you. As rents go up so does your cash flow. One of the richest land owners in California has never sold property, only purchased. When it comes to financing, I have been in lending for more than 20 years (yes, this is the commercial). Good luck please call me if you need financing.

Jack Martin,
Windsor Capital
949-766-6535