| by Kenneth Chase | 48 comments

How To Know If a Property Is A Good Investment


Listen, you don’t have to search very
hard in the real estate game before you get somebody that’s going to come along and
say, “Hey, I’ve got an amazing deal, you got to check this out.” And the reality is, it
might be the most amazing deal but there’s a chance that it’s a nightmare
packaged like a present and when you open it up, there’s gremlins going to
crael and rip your heart out, it’s going to be all bad nightmares.
So how do you really know if the deal is really good or not?
That’s what I want to share with you today on Limitless Wealth TV. I’m amazed
at how many lessons hindsight has to teach us by the time we wrap up an
experience. In the game of real estate, my favorite part is when we get to the end
of the deal and I get to look in hindsight because I started with an
expectation of what I hoped would happen and then when I get to the end, I’m
looking at, did I actually get what I wanted? And in the world of real estate,
you are going to meet bird dogs, realtors and people, they are going to tell you this
is a good deal. Heck, if you work with me and my team, we’re going to say, this is a
good deal and today’s question is, how do you really know if it’s a good deal?
Let’s dive in. So imagine this scenario. I’ll never forget this happening to me. I
have this realtor come to me and they had this deal that was so incredibly
good and so I met with them so that they could actually show me the deal,
they emailed it over to me and because I was a seasoned investor, I was shocked at
what I saw, whether this realtor knew it or not, they had sent me a
property with numbers so doctored up, altered, changed, enhanced that it had
taken a property was for sale and added $200,000 of value to
it that simply wasn’t there and they were telling me this was a screaming
deal and it’s either this person’s going to hell or this person has no freakin’
idea what they’re doing and I just had to know which really was it and
today’s video is to protect you from falling in line with people that are
telling you there’s a good deal and you’re taking their word for it
versus do in the real sniff check. I want to talk to you today about the sniff
check. How did I so easily know that that deal was not a good deal? Well before I
teach you the principle, I want to share with you something.
The only way to really know what a house is worth is when you sell it but
we’re buying, we’re not selling so we’re trying to find a way to read this
crystal ball and the best way to know what something is worth is to take a
look at the other similar properties that have recently sold in close
proximity and the feeling is, this home, if it behaves enough like those homes
then we should be good. To give you a really simple example, let’s just imagine
for a moment that we were trying to buy a condo.
I don’t do condos but let’s just say we were buying a condo because there’s a
row of a hundred of them and in the last six months and they’re all the same
minus six some have nicer condition, maybe one has tile, one is linoleum,
they’re the same, okay, we got a hundred condos and you have a condo and it’s
time for you to sell this condo and you have five other neighbors in the last
six months down the road that successfully sold their condos, all of
them for a hundred thousand dollars, what do you expect you would probably get for
your condo? Probably a hundred thousand dollars, right? Because in the last six
months, these other almost near identical properties sold just the same, that’s
what a good CMA is trying to do. What this one realtor had done and presenting
me this deal, is they took this tiny 2,000 square foot home and they
compared it to a 5,000 square foot home that was in the river bottoms
in one of the nicest parts of town and the house was hundreds of thousands of
dollars worth more and when they put it into the computer system and compared
them like, hey, let’s say that this $200,000 home is like
this half a million and you know what that half a million dollar home did? It bumped
up and skyrocketed the value of the other home, that was a misjudgment, that
was a mistake, that was just blatant error and I’m just praying for the soul
of that human being that they had no idea what they were actually doing in
fact, that really had to be the case so how do you really know if you got a good
deal or not? You need to first of all request to CMAm a comparable market
analysis. Right now in the United States, there’s several different of these
systems but what they all are designed to do is to take the subject property,
the one that you’re looking at buying and they’re going to compare to other
properties. Now who chooses which properties to compare it to? The realtor
does and in my world, I do. Right now if you’re brand new, you’re going to
your realtor, you’re going to trust what they say but I’m not telling you not to
trust your realtor, I want to train you how to trust yourself and how you can
verify information rather than just trusting information at face value so
you don’t find yourself getting into the wrong kind of investment so as I share
that with you, here’s what you need to understand. When a realtor is performing
this computer analysis, a CMA, they’re going to take the property that
you’re trying to figure out the value of, they’re going to do this comparable market
analysis and a list of homes are going to come up that have sold an area. The most
responsible thing that realtor can do is find the closest homes that are the most
similar in style so I want you to write down some of these things. Number one,
proximity. You don’t want to look at homes that are a mile away or two miles
away or three miles away, you’re looking for homes that are around the corner as
much as possible. Number two, homes that are similar. Don’t
compare a single-family home to a condo, don’t compare a million-dollar home to a
to a small simple single-family home. You’re looking for a home, it’s like if
this one’s 2,400 square feet on a split-level with 1,200 down and 1,200
down, up and down, then what am I looking for?
Split-level homes with similar square footage. I’m looking for similar bedrooms,
I’m looking for similar bathrooms and if I can find all the homes and by the way,
the more the merrier but you need at least three, if you’re selling a lot of
homes in your market, you might have 30 to pick from, maybe a hundred to
pick from. If it’s been really slow in the market, you might not even have one
or two and then it becomes a big guessing game but if the market’s moving
in you’ve got homes have sold in the last six months, take as many as possible
that are as similar to yours. Compare a 3-bedroom home to a 4-bedroom home maybe
but not a 5, not a 6. So you get them all the same and then at the end of the
day it’s going to spit out a number and say, well, if you wanted to compare it to
these very similar homes that sold, this is what it’s worth. I’m telling you right
now, you don’t have to be an experienced investor to pick that report apart, all
you’re going to do is look at across the board because it’ll stack up the homes
next to each other, square footage, square footage, square footage, square footage,
toss out the anomalies, toss out the weird ones and ask questions, ask why is
this one different? Oh, well, that home was are foreclosure, it’s
like, do we really want to compare to our foreclosure? This isn’t a foreclosure. No,
we probably don’t. Hey, this home is in pristine condition,
this home is not, do we really want to use that as a comparison? Hey, this home
is 500 square feet bigger, do we really want to compare to that one? Hey, this is
a four car garage and this is a two car garage, do we want to compare that? The
system will make a financial adjustment but it doesn’t do anywhere near the
justice and this is the part that I want you to write down, the system will make
adjustments but it doesn’t do anywhere near the justice of just picking good
comparables in the first place so that’s really what the game comes down to, what
I will do if I’m sitting down with the realtor I don’t know, I will actually sit
down with them when they do that report and I’ll say pull up the list of
properties and then we’ll look at them together and select them and I’m actually
going to help use their license to generate the report I want because
that’s really, I’m going to put my highest confidence into a good report that I
helped create. So friends, at the end of the day, if you want to know what deals
good, do not take someone’s word for it, instead learn how to read the numbers
and understand the basic science of a comparable market analysis. If you want a
better understanding of this or if any of this video went over your head, I want
you to click the link, when you go there on my website, you can download my book
in PDF format, e-book and audiobook totally for free. Some of you like
audiobooks, get the audiobook but I want you to also get the PDF ebook because I
want you to skip to the section that talks about performing a comparable
market analysis and I’m really going to point out step-by-step exactly how you
do that, that’s the best gift that I can possibly give you today. At the end of
the day, it’s going to come down to aligning yourself with people of honesty,
integrity with a great track record, not so you can trust them but so that they
can do their part to present you with accurate good information in the first
place and then you can learn how to read and interpret that information to make
good choices that you feel good about. No gremlins, nothing climbing out of the
package that’s going to be bad, smells weird. Friends, you have the ability to look at
these deals and know what’s good and know what’s not. Download my book, click the link
like and mention over here get you some more information and get
the PDF version so you can see all the visuals and not just audio wise here
and that’s going to help train you up to be a wise smart investor. A little bit of
knowledge goes a really long way when it comes to this game of real estate and
we’re friends, right? So what I want you to do, subscribe, hit the bell so I can
notify you when our next videos come out so we can keep training you how to be
the smart investor.

48 Comments

Muzammil Junior

Mar 3, 2018, 3:55 pm Reply

always love your work

Alex Mason

Mar 3, 2018, 5:11 pm Reply

Im new to this and your videos are really helpful. Thank you for make them

Hellsong 99

Mar 3, 2018, 5:48 pm Reply

Hey Kris, I had actually contacted you and your team last year, I just have a question because I am a real estate agent and just sold my first home, now since I’m in a different country I’m going to do a basic conversion to US dollars, now I have a property close to a university it is valued at $310000 but it is on the market for $250000, now if one were to develop the 15000 square feet of land on the stand to accommodate 60 students and you rent them all out for $400 per student, would it be a good investment?

Financial Investor

Mar 3, 2018, 8:02 pm Reply

Good Video Kris, I've been doing a market analysis on a few local cities to see where I want to invest locally. I'm also looking elsewhere at turn key, do you have a spreadsheet of the step by step process of those who work with your team?
Thanks!
Brent

David Connor

Mar 3, 2018, 1:49 am Reply

You talk a great game. But where is the proof that any of what you say you've done is true? Your principles seem to be convincing, but you leave way to many questions unanswered without even realising it. If you shorten your videos to under 4 minutes, you might get more views because let's be honest, those numbers are weak.

irainkoolaid2

Mar 3, 2018, 5:10 am Reply

Hey kris, I’m working with your dfy real estate group and wondering, are the homes they offer already compared with the others around it? Like was there a cma performed on it already and that’s why it’s being offered because that makes it a good deal? Or do I pick a home through them and need to perform my own cma (which would be awful) Thanks!

Hester boy Games

Mar 3, 2018, 1:38 pm Reply

i dont understand real estate investing do you buy a house than sell it with equity ?

Tito Titos

Mar 3, 2018, 4:18 pm Reply

The website does not let me get the book…..I tried multiple days, multiple tries.

C L

Mar 3, 2018, 10:11 pm Reply

What's your opinion on Jersey City real estate market

Fabian Andino

Mar 3, 2018, 9:30 pm Reply

Can you do a video on after repair value for an equity market?

Flo Fontanella

Mar 3, 2018, 10:56 pm Reply

I entered my email address to download the book and since then, I've been bombarded with spam. WTF?

Ronard Droono

Mar 3, 2018, 10:20 pm Reply

Three videos and ZERO usefull info….just promises)))

Rho Rho

Apr 4, 2018, 3:46 pm Reply

Have u ever try to sell a haunted house

Sylvan Forsberg

May 5, 2018, 8:01 pm Reply

How get 253 acres For $119900 and make a good profit from it

Tacoma FAN

Jun 6, 2018, 11:08 pm Reply

Good advice !
# 1 Dont trust realist-ate agent! every agent is different ! same as a car sales person !

Arshdeep Sharma

Jun 6, 2018, 4:04 am Reply

How do you know that the price you are comparing with is exact

HorsemanUnknown

Jun 6, 2018, 12:32 am Reply

Hey man, how do I apply the system in the UK where we don't have Home Equity Line Credit? system seems great but ours doesn't have that nice trick to get more property quickly?

Jose Ortega

Jul 7, 2018, 3:39 pm Reply

I just finished the book, I don't know if you have addressed this yet kris, but NONE of your website addresses on your book actually work?

Rian O Luasa

Jul 7, 2018, 9:47 pm Reply

Interesting start to the video

Gideon Nnaji

Jul 7, 2018, 5:11 am Reply

I cant download the book dont know why

Ali Bekir

Jul 7, 2018, 7:41 pm Reply

First of all what about NOI,ROI etc etc?

Carlos Fernandez

Jul 7, 2018, 1:20 am Reply

Are foreclosured properties worth investing?

Jennifer Gonzalez

Jul 7, 2018, 5:05 pm Reply

Pretty repetitive

Donnie D

Aug 8, 2018, 6:03 am Reply

Hey Kris, question here. How would I go about investing in real estate from another state? Currently in Ca, but looking to buy in OK.

Niccolo Aurelius

Sep 9, 2018, 10:29 pm Reply

Really useful video, thanks!

snapascrew

Sep 9, 2018, 8:26 pm Reply

this guys videos are awesome because if you just straight up listen to him and take some initiative you can make this life your own.

Slim Chain

Oct 10, 2018, 7:06 pm Reply

Can u hire a contractor or an appraiser instead of a realtor to determine home value? What's the best choice between these & what's cheapest?

MARIA GUERRERO

Oct 10, 2018, 7:31 pm Reply

Can you do a video on manufactured homes? Are they worth buying?

Paige Nicole

Oct 10, 2018, 3:27 am Reply

Im 18 years old manager of a pizza cafe and don’t know what i want to do with my life yet, with no successful people to surround myself with and im young so im gonna save and build my credit for a year and try your ways. Wish me luck!

Teddy Woodhouse

Oct 10, 2018, 4:37 pm Reply

Hey Kris, first off love your videos and great info! Just FYI – tried clicking the link to get the audiobook/book and received the error message – "Error 404 – Not Found" Hopefully it's not my own user error but either way, please advise. Thx – Ted

Daniel Altuzarra

Nov 11, 2018, 4:32 pm Reply

Great advice thank you son much

Damon Keizer

Dec 12, 2018, 3:48 am Reply

Great video! Thanks Kris.

Kareem T

Jan 1, 2019, 3:20 am Reply

Thanks for being real

Mathew Joaquim

Jan 1, 2019, 5:07 pm Reply

Thanks for the book kriss (pdf version)

Stephen Murray

Jan 1, 2019, 7:57 am Reply

great videos.

Tomislav Budrovac

Feb 2, 2019, 3:09 pm Reply

404 File Not Found!

Vasile Botan

Feb 2, 2019, 4:54 pm Reply

Kris, How can I get a PDF format of your book?

tyler romero

Mar 3, 2019, 11:52 pm Reply

" Trust myself", said Kris. Teach yourself to advise yourself. That is the take away. Thanks Kris!!!

tyler romero

Mar 3, 2019, 11:53 pm Reply

Kris, where should the guy without comprehensive MLS access get access to this information. Can it be purchased or does your site offer it?

Brishna Mirza

Mar 3, 2019, 11:37 pm Reply

I wish I could be your student 👩‍🎓

G V

Mar 3, 2019, 2:54 am Reply

Theres no free pdf for the book in your link just paying to be shipped lol

al Tenacious

Apr 4, 2019, 1:23 am Reply

I’m trying to find mentor, I’m living with family/friends with my fiancé and my son and a dog and I really want to move forward!! I’m so driven for opportunities to come my way in life and I’m ready to learn anything and be the hardest worker! I’m ready to improve!

ɱễśțễř ẶĶ

Apr 4, 2019, 2:23 pm Reply

.

Clika Los Necios

Apr 4, 2019, 5:06 pm Reply

bro, ive been watching your videos the last couple hours! amazing information! your one of the first or maybe the only one that actually really cares instead of trying to just sell us a program…. Thanks

Agnieszka Jachimska

May 5, 2019, 1:28 am Reply

where do you find the reports that are reliable?

Mr.chicken

May 5, 2019, 3:53 am Reply

Your mouth is champion

Jose

Jun 6, 2019, 10:59 pm Reply

Awesome videos Kris, thank you!

Kaneesh Nair

Jun 6, 2019, 3:03 pm Reply

Learning a lot from you guys, worth watching it!

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