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Peter Vexcel (00:00):

Hey, good evening, everybody. Good evening, good evening, Peter Vexcel here and I got Julie Muse on the other side. How are you, Julie?

Peter Vexcel (00:08):

Doing awesome, doing awesome. Thank you.

Peter Vexcel (00:11):

Good evening, everybody. It’s Tuesday night live. We got some great stuff for you today. Today, we’re going to talk to you specifically about how to identify values of properties, as-is values, ARB, we’re going to talk to you about how to put that information together, how to correctly interpret it. Right? Cause it’s not just a matter of putting it together. It’s understanding. Good deal, bad deal, deal, no deal… So we’re going to talk to you guys about that.

Peter Vexcel (00:37):

So sometimes we have these webinars and I tell you, I’ll just say, Hey, sit back, relax, enjoy. You’re going to hear a great story. You’re going to hear something that..t That it’s going to inspire you, that’s going to move you forward. Today’s one of those days, you may want to take some notes. Okay? Because today we’re going to use some actual numbers. We’re going to use some actual examples.

Peter Vexcel (00:57):

Today, you will actually walk away really knowing how to do a very important part of real estate. And that is an understanding, “Hey, what am I looking at? Am I looking at something that does make sense? Or, or am I looking at something that does not make sense?” Having said that I’m sitting here scratching myself. I was literally just walking my dog 10 minutes ago and I’m talking on a phone -I kid you not-, talking on a phone and I can’t figure out this incredible pain I’m experiencing. And I looked down and I’m literally standing in an ant hill and this might, I am, I had become part of the ant hill because there was just as many ants on me as there was on the ground. I’ve never experienced anything like that. I don’t even know why I’m talking to you about it. So, I’d been in battle in the last 10 minutes, but I am alive, I am well, I’m glad you guys are here. It’s a, it’s amazing. It was a dreary day here, Julie, but man, sun is out in Atlanta right now.

Peter Vexcel (01:56):

Well, I’ll tell you at my house It’s not. It was a crazy day. I, um, I was in a pigeon forge, Tennessee over the weekend. And through today, my niece turned 12 and we took her to a, uh, indoor water park there. So it was a good weekend. But as everybody’s jumping on, um, Hey, let us know exactly where you’re from. We’re already seeing people popping on, um, Batali from Portland, Oregon. Hey, one of our newest members, um, Brad Woods from Marietta, Georgia. So excited to have you on the partner-driven max team, looking forward to working with you. We’ve got Eugene from Chicago, Illinois, um, Michael from Baton Rouge, Louisiana, Hey, someone said, put apple cider on this bites. Somebody else says you gotta put tea, tree oil.

Peter Vexcel (02:55):

Well, and I appreciate it. That is the power of having a team around you, that is the power of having people around you. Um, I think I’m okay now, I think it was mostly shocked that, like, what the heck is going on here? Cause I walked scout our dog it’s same route every single day. But having said that, I, uh, I really do appreciate it. We’re going to get started here in just a minute or so again, glad, we are glad, glad, glad you guys are on. We here at partner-driven have been extremely busy. We got a lot of things happening, a lot of really good things happening. Um, it’s just amazing that, um, you know, we here partner-driven would basically work with people and we partner with him and it usually the growth, or at least everybody thinks the growth is like, will you take a new partner and you help them grow. And sometimes people forget that even at our stages, you know, years and years into the business, we’re still growing. We’re still inventing and reinventing ourselves. We are still celebrating people’s, uh, successes. We are still coming up with more innovative ways of, of how we can help our partners can, uh, do deals and do deals quickly. I’ll tell you, uh, Julie, this, I know you guys can’t see this, but this text I was just having with Ms. Patricia from Florida, um, so we’ve done, you’re telling me we already done three deals with her.

Peter Vexcel (04:14):

So we’re working on our fourth and we got another one, we got another one that we started with three months ago. That was in probate, but it’s about to be not probates. So we’re about to be working on that one too.

Peter Vexcel (04:26):

Well, the one we’re working on right now, it’s a rehab pretty major rehab in, in… And I love Ms. Patricia from the day she got into it. She just had the sweetness, but the termination in her, I was actually so excited when she did the first one or two deals I wanted to personally come over there and give her half of her profit. She was busy. She like literally blew me off. So she was just texting me. She’s like, “Pete, next check, you’re coming over”. So next check , I’m heading over there and uh, and giving it to her. And… I say this ’cause I was just talking to somebody earlier today, Julie, a couple hours ago. And I mean, you and I both celebrate wins all the time. And we love, love, love closing deals for, for us to sit here and tell people “It’s not that big of a deal” That’d be lot. But man, I was just sharing with some people here a little bit ago, what, how exciting it is to close a deal, but close it with a partner, isn’t it?

Peter Vexcel (05:16):

Oh my God. It’s, it’s incredible. You know, and when you’re talking about celebrating wins, um, a lot of people say, “don’t celebrate, don’t cell… Celebrate a win in real estate until you close the deal”. Have you guys ever heard that? Like, don’t celebrate it until it’s closed. ‘Cause let me tell you, after doing all the deals we’ve done, not every deal closes, but you know, as, as I’ve been this for a little bit, really the most important thing you could ever do is celebrate every win there is.

Peter Vexcel (05:54):


Peter Vexcel (05:54):

And maybe you might look at it differently than me, but as somebody with a little bit of a competitive personality, I believe celebrating every win you have is a big deal. So guys, if you’re out there, celebrate your wins. So if you’re making your first phone call to a seller, celebrate that. If you made your first appointment, celebrate that. To get your first deal under contract, celebrate that. Because this is a business where a lot of times you feel a little bit lonely out by yourself, and I promise you celebrating the wins will help you move further and further and further. And to this day I celebrate every appointment, every contract, whether I close or not. So, and you’re right, that is gratefulness to everything that you know, that, that, that I’ve learned over the years. And speaking about Patricia, I’m going to talk about different conversation that we had today. So Peter calls me today and she goes “so have you guys ever heard about the gentlemen set that does all a bunch of deals?”

Peter Vexcel (07:06):

I know a lot of you have. Um, so he’s like, she’s like: no, Peter calls when he goes well, is Patricia like set? And I’m like, absolutely not. She’s nothing like set. She’s nothing like set she’s actually probably the opposite of set , but I’ll tell you one thing that keeps her… That makes her very successful. Is she’s a very humble individual? She has a authoritative, um, demeanor about herself. So like when she says something, I mean, I believe everything she says, I take that is from years and years of being in law enforcement. I believe you develop those things. But God, you know, as we had that conversation, I, um, started thinking nobody needs to put themselves in a box to be like somebody else, because no matter what life experiences you have, you don’t have to be like anybody else, you all have strengths. I mean, it really don’t matter what your background is, as long as you’re a genuine individual. People know that, and that is truly the key to it to be in successful when you’re talking to sellers. And in my opinion, getting deals under contract it’s, it’s, it’s being a genuine individual. Right? I don’t know. Maybe, I don’t know. Maybe you guys can tell, but I can tell to an extent if somebody’s being genuine with me or not, can you Peter?

Peter Vexcel (08:46):

No question. We’re in a people business and I’m from RN. We’ve talked to so many people. I like Julie. I feel like I have a pretty good knack for it, but it’s also very important from each of our standpoint that when we go out there and we put deals together and we talk to sellers and we talk to other members of this business that we come across genuine also, because I could tell you one thing, and this is not the topic for the night. We’d better get on the topic for tonight. I can tell you one thing: all day long, I’d rather talk to somebody who’s genuine than who’s not genuine. Somebody that I feel good about as opposed to I feel not good about, somebody that I feel is kind as opposed to someone that I feel is mean. And, and so we all know which side of the equation, uh, each and every one of us rather end up on. But aside from that, I promise you whichever side of the equation he truly do end up on that’s how you perceive to the world. So Julie’s, Julie’s absolutely right.

Peter Vexcel (09:38):

All right. Well, having said that, let’s get rolling. So once again, my name is Peter Vexcel an on the other end is Julie Musa. Julie and I have been together for just a little bit over 10 years. And what we are, if somebody were to stop us in the street, is we are real estate investors. When we initially met, we met from… Through my real estate investment company and we ran, had an incredible run, in the real estate investing business. Did a ton of deals, developed a very mature, a very sophisticated, a very profitable real estate investment company. We expanded that investment company beyond just our borders here in Atlanta. I think our first setup was in, um, isn’t Jacksonville?

Peter Vexcel (10:27):

Uh, we then set, you know, separate operations all the way up to Jackson… All the way to California. And, uh, and then we, you know, went beyond our local borders and we said “how do we really, really get big in this business?” And we said, why don’t we just work with everyday people across United States that want to level up that are coachable that want to be successful in real estate investing business? Why don’t we partner with them and why don’t we start doing real estate deals? And that,, now years ago was the initial beginning of what we call today the partner driven real estate investing model and what we do today, Julie and I, and the team behind this, is we literally partner with people across the United States, whether it’s somebody brand new or whether it’s somebody who’s done a number of deals already and looking to level up and get to the next levels. And we provide to them what we call the pillars of success. These are the essential components that everyone needs in order to be successful in real estate.

Peter Vexcel (11:12):

Number one, knowledge. You know, I don’t think anybody ever built this business off the cuff, not successfully, maybe here and there, a couple of deals, but this is not a business where you want to just kind of experiment with everything. And so you got to know what you’re doing. So we deliver, and we literally over-deliver on the coaching and mentoring accountability side and instruction side. So our partners have the ability to themselves become exorbitantly savvy as investors. Number two, we get involved in lead gen. Not only do we teach our partners, the finer aspect of lead gen and marketing and all that, but we actually get involved with them and help them actually solidify legitimate deals, right? Where they live.

Peter Vexcel (12:01):

Number three, we provide technology in today’s world, pretty much in any industry, you need to have access to technology. We have an incredible app that we developed here, called Deal Driven, and through deal driven. You could pretty much build your whole real estate investment business through it. You could pull lists, you could look at equity plays. You could look at in-house in-state owners out of state owners. Uh, you could identify pre-foreclosures. You could identify, um, you could skip trace to find out. I mean, literally from your phone, you could build your business. It’s literally what we call business in a box. Next, we provide all the capital, excuse me, to our partners. Uh, when we do deals, whether they’re short-term deals or fix and flip deals, that’s all on us. And then we put them into market, sell it and split the profits down the middle 50-50, the local partner keeps 50%. We keep 50%. And that right there is the partner driven model.

Peter Vexcel (12:49):

Now what we’re here today to do is we’re here to teach you guys what I consider to be a very important side of this business. And that is how to figure out values in terms of “what am I looking at here?” Right. I can tell you for those of you that have heard my story know that when I started in this business, I took a lot of wrong turns. Like, like every turn you could take, I took. I mean, literally and ended up in a very bad financial situation, ended up in very bad situation all the way across the board, really situation that took me years down the road to literally recover from. Um, but I could tell you one of the biggest reasons, there were multiple reasons why I ended up making the mistakes I did. One of the biggest ones is I literally did not understand how to determine values, how to look at comps, how to determine what something’s worth.

Peter Vexcel (13:37):

And that one little mistake… Now, trust me, I’ve made plenty of other mistakes, then I’d understand how to do rehab and I’m doing say anything, but that one initial blunder on every single deal potentially could have prevented that me for making all the other deals, because this is what I tell people. Sometimes a deal you walk away from, is the best deal you’ll ever do. So had I walked away from those initial six deals that put me under? Had I really understood how to determine values? Because that’s where it was started. I was miss… It was misrepresented to me the numbers. And because I did not truly understand the numbers and how to evaluate numbers and how to determine whether something was a good deal or a bad deal. That’s what got me on the pathway to making that initial critical, bad decision by or not by. And I could tell you, I could even make the argument beyond that.

Peter Vexcel (14:47):

If you make that initial decision correctly, it even allows you room for some air on some other decisions you have to make. But if you make that initial decision incorrectly, you can execute a brilliant deal, but a money loser is a money loser is a money loser. So that initial deal, that initial, that initial decision of understanding… Let me, let me, let me, for instance, give you an example, and I know Julie’s going to get into this. I still very clearly remembered riding around with Jeff. Jeff was the name of a realtor, uh, that we used, and there was a deal here on Moreland. I think it was on Moreland, uh, avenue. And I remember looking at this house and the house was selling for like, I think, I can’t remember three, four hundred thousand dollars. And we were literally inside a little subdivision and working off Moreland avenue. Moreland Avenue was like a huge drag, but off of it, there’s some side streets and there’s actually a couple of little subdivisions off of Moreland avenue.

Peter Vexcel (15:51):

So I remember being inside this little subdivision, not more than 40 or 50 homes, but remember it was a subdivision, looking at this property. And I remember I was brand new back then. I mean, I really didn’t, I understood concepts, but I didn’t understand reality. Okay? And so I remember looking at this house and I wanted to do it, like, have you ever been there if you’re brand new in this business, right? You just like want to make things work, right?. Because you know, you know that, the first step to making money is finding a deal, right? So, uh, just, you know, you, you…everything takes over your emotions, take over. Excitement gets over and you, and at that point, you’re very susceptible to wrong information, right?

Peter Vexcel (16:33):

Once you are the most susceptible to wrong information then you get emotional, right?. And when you get the most emotional, when you’re trying to do your first one or two deals, right? Because it’s like, you could see the light at the end of the tunnel, you could see: “wow, I’m finally going to get that deal. I’m finally gonna make that money. I’m finally going to have some options”. Right? And that is the, that is the most dangerous time of not knowing something. So we’re sitting inside of the subdivision, Jeff’s show me this house. Uh, he’s explaining to the number it’s working out, here’s the purchase here’s rehab. Here’s what we could sell it for. And, you know, I didn’t understand everything, but I just understood enough to ask him the next question. I said, “Jeff, well, how do I know we can get whatever for it?” And remember I was brand new. I didn’t understand rules of engagement. I didn’t understand the legit versus not legit. And I still remember Jeff and I getting into his car and he driving out outside of that subdivision, going down the street, not far, maybe half a mile, quarter. And he shows me a couple of houses that were like, see, these homes are selling for this amount.

Peter Vexcel (17:38):

And although it didn’t feel a hundred percent right, Like why did we leave? I talked my way into thinking, well, there’s probably not something in there he could show me. There’s probably nothing for sale there. Like not realizing, well, maybe there was something for sale and just sold a couple of weeks ago, right? Not even, not even wanting my mind to go there because I wanted to make the deal work. And so he showed me outside the subdivision comps and Julie will get you in technicalities of what’s legit and what’s not legit. And bottom line is I did a deal. I did a deal from day one. I should’ve walked away from. Had I…? It didn’t matter how well at that point I would have executed the rehab, which by the way, I didn’t execute good. It didn’t matter at that point, how cheap my money was. It didn’t matter at that point, whether my closing attorney charged me $1,500 to close or 2000 hours to close, none of that mattered, right? None of that mattered.

Peter Vexcel (18:31):

When you got a ship with no engine, is crashing. And so what took me six months to find out is at six, it takes, you know, it took me six months to execute the deal was already predetermined on the front end by me not understanding how to correctly comp numbers out. And I could tell you almost across the board, across the board, I see this day in, day out, there’s some basic fundamental mistakes I personally see people make when it comes to figuring out what these numbers are. Number one, mistake. And again, this is all tied into emotion and making, wanting to make something work. Right? Number one, mistake. Who are you getting your numbers from?

Peter Vexcel (19:22):

I’ll tell you another story. There are some islands off the coast of North and South Carolina. I mean, literally at the tip where North and South Carolina come together, some islands they’re called Oak islands.

Peter Vexcel (19:32):

And many, many years ago started going there, like going there like 3, 4, 5 years in a row. And nobody knows about these islands is that there’s a chain of little islands. They’re very secluded. And I fell in love with those islands. I fell in love with those islands enough to think, “wow, maybe I should do some deals here”. ‘Cause you know, come here every year, sometimes a couple of times a year. And so what did I do? I called the local real estate agent. And here’s what he heard me say, !Hey, I don’t live here. I don’t know anything about this area. I really have no boots on the ground. Um, feel like I don’t really understand anything about here. Oh, the reason I want to buy here is, cause I think the beaches are really cool. And I like coming back here!, You get the point? He heard everything. He needed to hear to know that I didn’t know what I was doing.

Peter Vexcel (20:19):

And he started bringing some deals. And within a couple of months, four or five months, I’d bought five properties there. And I bought every single property based upon the realtor. And I learned a very important lesson: don’t ever, ever, ever get your numbers from whoever gives you the deal, especially if you don’t know that person. One of the biggest mistakes I see investors make is getting their numbers from whoever brings the deal to them. A flyer from a wholesaler, an agent, a seller, trying to sell a property, telling them what it’s worth. You never, ever, ever want to get numbers from the person that brings the deal because what are you to them? You’re a paycheck. You’re just a paycheck.

Peter Vexcel (21:17):

Now it’s okay to take the numbers in, but you always, always have to verify. And Julia, we’ll walk you through here in the next minute or so of how to actually verify things. Don’t get emotions get in the way, don’t get your information from the person that brings you the deal. Unless it’s somebody like that we have in our circles. That’s been with us forever that we’ve done tons of deals with that. We trust implicitly, but that takes time and notable deals to develop. So don’t get emotional. Don’t get your numbers from the source that brings you the deal and above everything else. As Julie walks you through to how to get these numbers, I will tell you this from my personal end. Verify. Trust, but verify. Even yourself. I mean there’s places we’ve done multiple deals in, that I, we still verify like, there’s places across the country that we have, you know, some pretty decent. Even here in Atlanta, I would never buy property based upon somebody bringing it well, I’m verifying it with a third party. Another agent that I trust.

Peter Vexcel (22:16):

‘Cause things change, things evolve. Sometimes it’s literally in, if you’ve done real estate, you know, what about they tell you, sometimes it’s literally a block to block kind of a combat. It could be one block here at a hundred thousand and go five blocks here. And you’re at one twenty, and it’s like, whoa, I just missed that by like 10 addresses. So don’t get emotional. Don’t get your numbers from the person that brings it to you and trust, but verify everything and check and double check and triple check.

Peter Vexcel (22:51):

So Julie, I’m going to flip it over to you. You’re going to get a little more on the technical side of actually how to go about doing this and um, talk a little bit about this. What are these comps and how do you get them on all that?

Julie Muse (23:05):

You know, Peter, um, one way, and I’m going to show you guys how to pull some comps and how to look at some numbers here tonight. Oops, excuse me. But one way a lot of people get comps is they they’ll ask a realtor for a comp, right? Um, you’re like, okay, well they’re a licensed individual. They, you know, went through real estate state training. They pass the exam. So therefore they’re a licensed individual. So because of that, you know, you, you want to believe everything that they have to say. Now, but, the way I truly, you know, love licensed individuals, I love the job that they do, but there is one disservice that licensed individuals face whenever they’re in the real estate business, is that they are not tested on their ability to comp properties. So based off of their recommendation, sometimes they could get you in trouble, just like with what Peter said.

Julie Muse (24:06):

So for you to understand the important things that it takes to know what makes a comp a comp, is really important. Okay. So… I want to share a few properties with you tonight. We’re going to go through them individually and we’re gonna… I’m going to show you what are some of the things that we look for. Okay? Um, all right. So I’m going to share my screen here. Um, and this is an… Sorry for the lack of Thom this evening. Um, I’m not going to be able to show you how I pulled these lists, how I came up with these addresses. Um, you can watch some previous episodes for that, but let’s just take, for instance… I want to show you how I can look at property values in a different location than me.

Julie Muse (25:08):

So I’m in Georgia. I’m just going to go to, let’s see Chicago. This is a list that I pulled a little while back on some deals that I’ve found in Chicago, um, or in that area. So let’s just pick one. And when I’m looking at the comps of the property, utilizing deal driven, there’s a few main factors. Number one, the main factor that I’m looking is, oh, my… a comp is a comparable. Okay?. So there’s two different types of comps, um, or comparable. So you have, what’s considered an ARV, which is an After Repair Value. Meaning you take a house, you fully fix it up. Like you might, you know, renovate the kitchen, renovate the bathrooms. And once you’ve done that, then there’s a certain amount the property could sell for. Then there’s another comp, which is an as is value. And as this value is, if I were to sell it just like it sits, what could I sell it for?

Julie Muse (26:18):

Does that help, Michael? Just give me a yes in the chat, because I just want to make sure that I’m not going too fast for anybody. So let’s say that I was going to buy this property here, um, on 327 Benzley avenue. Okay. So I’m looking at Benzley avenue and the things that I’m going to look at before I even look at properties that sold around it is this: I want to know the bedrooms, the bathrooms, the year built, the square footage. Okay? And it’s not bad to look at the garages. So by looking here, I could tell it, this is a three bedroom, one bath with a partial bath. So what the difference between bathrooms and partial bathrooms? a full bath is always going to have a tub or shower or tub-shower, combo, a lavatory and a sink. That’s a full bath. A partial bath is going to be your sink and just your lavatory with no shower unit or no tub. Okay?

Julie Muse (27:32):

So this house is a three, one bath with a partial bath built 1968 with 1,245 square foot. Okay Um, with a two-car garage. So that’s the main thing. So normally if I’m looking here and I’m not going to need you guys to help me remember what we saw on this screen, because, let’s be honest, I’m getting a little bit older and my memory is not as good as it used to be. So we got a three, one and a half built in 68, 12,45 square foot. Now, when you’re looking here at Gill driven, I did not pick an easy property. So they’re saying that the valuation of this property could be between 1-12 and 1-96. Do you guys think it’s important to know the difference? If your property could sell between 1-12 or 1-96? That’s like the difference of losing your shirt or being extremely profitable.

Julie Muse (28:34):

Well, um, there’s another number here, which is the estimated valuation. This comes from a national title service. And it’s saying that, that they believe that the valuation of this property is 1-64 with 68% confidence in that number. Well, does that make me feel warm and fuzzy inside? No, it absolutely does not because the numbers are all over the place. I would not use any of these numbers, but just because they’re so far left and so far right. And this would be a situation to where if he took one of these without looking further, you could definitely get in trouble. So I want to go look into this a little further. So, if you go here and we go to a comparables, it’s going to pull, well, it’s going to pull different properties in Illinois in this area. Okay? So as I’m looking here, here’s our subject property in green. Okay? What was the square footage again, on this property? I believe it was 1.246, 1.296. So within these properties are within a hundred square foot of the same amount of that particular property. So I would say probably this 1330 is very comparable to this. Okay?

Julie Muse (30:11):

So I’ll want to go look at these individually. Another thing I want to show you guys is, do you see the streets here? And, do you see, I don’t even know Chicago… I can live… the map… See the Sibley Boulevard. This looks to me… Grow this, um, highway 83. Property values, literally change street by street and neighborhood by neighborhood. Anytime you’re seeing comparables on the other side of a major road, that’s something that concerns me, but nothing pulled up this one, but check this one out. This one property over here on the end, it has a different city name. It’s on the very other side of streets, state street. I’m not sure if that’s a major road or not, but I can tell by just looking at the map that I really want to look at these three addresses right here. Okay?

Julie Muse (31:00):

So as I’m looking at these three addresses here, here and here… Do you guys see these property values? This three and one at 1,390 square feet, it’s almost a hundred square foot bigger than that subject property sold in July for $98,600. Well, that’s this one. This one sold for 114. This one sold for 88,000. Guys, If you would have looked at this property through any other resource on your own, did you all see where it said that the high price of this property would be $199,000? Did y’all see that?

Julie Muse (32:08):

I mean, when an appraiser goes out to look at a house they’re only going to look at what’s sold recently. That’s similar to this house. So if somebody would have told you on this house, this house could ARV -after repair value- at $199,000. Ooh, you’d be in big trouble on this deal. Okay? So, I’m wanting you to see now, not done yet, guys, on this property. So, I’m going to remember these properties for a minute here. So, I’m going to pull up.. Something here for just a second. And I’m going to copy and paste these addresses because I’m going to go look at every one of these, all of these sold, utilizing the MLS. Okay? You’d be amazed what you can find on your own. So I’m going to take this one property on Benzley avenue. It’s sold for 88K. I’m going to take the other Benzley avenue that sold for 114.

Julie Muse (33:19):

Now I’m going to take Hoaxy avenue. And it’s sold for, I don’t know, average 99. So, what I’m going to do here is I’m going to share with you this little thing that I made. So, now I’ve went here and I’ve got my three properties that sold next to this particular property. Okay? So average, if you were to take these properties and run your comparables on these, one, two and three, this will automatically give you an average of what properties around here have sold for. So it’s averaging out, is that a hundred thousand dollars right? Now, I want to take you back to this. So this comes, this is an algorithm. Anything you see here, valuation max, valuation minimum, estimated valuation. These are algorithms, Zillow, All of these people are, these companies run off algorithms. So, if you were to use this, Peter, in a realtor was to say to you go back 20 years ago and say, Peter, you could have bought this house in Chicago, this three, one and a half bath house. And it could sell for 196 because that’s what, like tools that I have as a real estate agent. And you bought this house for, let’s say a hundred, put 20 into it. You would’ve thought that to be a good deal.

Julie Muse (35:06):

Do you see guys how you could lose a hundred thousand dollars on a deal? By not looking at properties that are similar to this one that actually sold? Algorithms are not people. Another thing I want you to keep in mind: inside of a neighborhood, there are also, by the way, guys hang with me because we’re still not done comps property. Inside of a neighborhood. There’s other things that matter. Um, me and Brian, my husband, what was it like a week and a half ago? We went to look at a property, um, over here in, Georgia, Peter. And what I do before I ever go to an appointment is I wrote down the recent sales in that neighborhood. And I’m thinking, “Ooh, I have got a deal today because they agreed to 250,000. These houses are selling for 375”. So of course I get my car, my truck, and we drive over there and I had all intentions of putting this house under contract.

Julie Muse (36:14):

Guess what happened when I got over there. They had the smallest house in the neighborhood. The exterior of the house was siding and all of the houses that sold for that higher amount of money where two-story houses of brick. There’s a big difference between a brick house in a regular siding house. There’s a big difference between stucco and brick and siding, depending on where you live. So, when you’re going on appointments always take down what the recent cells are in that area and make sure you are, are literally comping apples to apples. And also the neighborhood beside it, before everyone went to the appointment, I drove the neighborhood is beside it. You know why? There were houses in the neighborhood that backed up to this neighborhood that were selling for 500,000. Completely different houses, completely different neighborhoods. Had I not known to… Had I not known to go drive and look at these properties, you would have convinced me that this house would be worth $400,000 based off of an algorithm of averages. Okay?

Julie Muse (37:41):

Now for a fairly new licensed individual, when they go inside the MLS, they pop an address in, and what comes out is that what they call a CMA, a CMA is a comparative market analysis. Okay? So it’s a system that does algorithm of recent sales, similar square footage. All of that, that CMA told me that same house was worth 400 and something thousand dollars. It was not. That house is ARV could barely be 295. Okay? So you’ve got to know the building structure, the age of the home, the square footage and where it’s located. Now let’s get back to our subject property. Okay. I know we’re into a lot of stuff tonight, but I’m not done yet. You really also need to go to auxiliary websites if you’re looking for the value of this house.

Julie Muse (38:49):

So, guess what I’m going to do. I’m going to go to the handy dandy Zillow. Okay. Why, Why, why as a, um, as an investor, why would you think that I’d want to look at Zillow? Put it in the chat. Why do you think I’d want to look at Zillow? Yup. Definitely property values for one. Why else? Ana, ding, ding, ding. You’re right, because that’s what your sellers are looking at. You need to know what you’re going into back with. If the seller sees something on Zillow and their mind, that’s the concrete answer for what that property is worth, right? So if you are going to be knowledgeable and know the valuation of a property, you better know what Zillow, Zillow and I have to say, Hey, Pete, can you see Zillow here for me?

Peter Vexcel (40:02):

I can.

Julie Muse (40:02):

Okay. So now I’m going to take my subject to dress, which has Benzley avenue in Chicago, Illinois, or I think it was called Met. Not sure if I’m saying that incorrectly. Comment, city, Illinois, you’re going to see other things on here. Okay? We’re going to see some other reasons. We’re going to see a Zestimate Zestimate again, based off of what? It’s an algorithm of recent sales in the area. So even Zillow’s telling you, it’s between 115 and 166. Are those close enough numbers to make a decision on whether you’d buy a house or not? No! No, absolutely not. So I’m going to show you some other features. So what this is doing is this is going here and it’s giving you recent sales of similar square footages. Okay?. You’re seeing, um, this house for 140, this one’s on Benzley avenue sold for 143 months ago. But look what it’s comparing it to, this one on Benzley app had a four bedroom, two bath. Ours is a three, one and a half.

Julie Muse (41:31):

This one on Oglesbee app. You see this one is sold for 136. Okay? That’s pretty similar, right? It’s a three bedroom, one bath. So it was this one. That’s three bedroom, one bath. Well, now you have to take it even a step further. Okay? Let me go look at Oglesbee app that I think is very similar to this house, which is number two, which is right here. So when I go to Oglesbee, one thing about Zillow, is they aggregate from the MLS. So when you’re seeing… Whenever a realtor puts pictures online, it’s going to pop up in here. I can tell by just looking here, this house is fully fixed up and renovated. Just waiting for my internet to catch up with me. Okay? This house sold for 136. Okay?. Well, if you look at the pictures here, look at this out.

Julie Muse (42:36):

Is that-does that not look brand new and modern to you? Look at the cabinets. Look at the backsplash. Look at the walls. They staged this beautifully. Look at the bathrooms. It’s fully renovated, new floor, new paint, new everything. Okay. So when you’re looking at the ARV, as opposed to the, as is even looking at the recent sells, now I’m going to look at the other properties I saw, I’ll tell you, they weren’t fully fixed up. On this house in CalMet Illinois. I would say your ARV on this is about 135 to 140. If it looks beautiful, like this one, do you know how much money it costs in towel work cabinets. These are brand new toilets, brand new floors. I mean, to take a house from 1965 to get it to this, could be every bit of $60,000. So whenever you were looking at comp houses, and this is not something you are gonna learn overnight, but everybody’s gonna understand this.

Julie Muse (43:58):

You’ve got to compare apples to apples, a four and two does not match a three in one. Okay? A fully fixed up house does not compare to something from 1970. And you’ve got to understand what it costs to actually get something to that standard. Okay? So all I utilize every one of these tools to determine what the possible ARV is. Now, how had I had went a different service and thought, “oh, this thing could sell for 200,000 because these other ones down the roa do for 200,000”, you could literally be off by 55 grand just on this particular property. Okay?. So I want to go over it one more time. If everybody’s okay with that. Hhere are the major things you should look for whenever you are comping a property or checking your as is, or your after repair value or your CMA, okay.?From a realtor.

Julie Muse (45:04):

Number one: beds and baths, need to be similar. A square footage needs to be similar. Year built needs to be similar. Sometimes it even matters the acreage like where I live having five acres is much. It makes a big difference as opposed to having a half an acre. Five acres of land the house could be worth another hundred, hundred and 25,000. There’s a lot of properties here that are five acre plots, not half acre lots. Making sure it’s in the same neighborhood. And then once you even get in the neighborhood, making sure that the finishings are the same, whether it’s brick, whether it’s stucco, whether it’s siding. Okay? So be very, very careful whenever you’re looking at comps and you’re making buying decisions that you know what sold, the more recent that it’s sold in that particular area, the better the comp is. Like right now, what you guys are seeing is something really crazy.

Julie Muse (46:12):

You were seeing, as the months go by, property values go up. Are y’all seeing that? Things are selling more now than they were in January. Okay? Right? People are paying more now than they were in January. Absolutely. Guess what? That is not a normal thing. And I personally, and nor should you, be in this business for a short period. So you also want to look at the date of the recent sell, that could make something go way up or way, way down. Okay? So you want to look at something within the last three months, if possible. All right?

Julie Muse (46:58):

So I hope this little, you know, this little thing helped you a little bit, at least helped you think about some of these things, but the best way that you can learn to do this is to practice. Take a house that you’re not even looking at buying and figure out how, how much you think it would sell for. Perfect, practice makes perfect. Okay? You don’t have to be working on a deal to understand these things You can work on these now, with the make-believe house, because you certainly don’t want to make this mistake on your first deal. Okay?

Julie Muse (47:39):

Now Paul says in Utah, they put a price on a house and take the high spit over appraisal. Absolutely. Right now is a very bullish market. People are paying above asking prices. Okay? Once they close on the MLS, which is the multiple listing services, and this is everywhere, Paul, um, it’s going to, it’s going to hit all of these other websites, MLS aggregates to, Zillow and all these things. So whenever something is sold, it is updated, which is going to drive the process up. You will see that whenever you’re pulling these comps. Okay? So, but you want to be weary of that, whether you’re in a bullish market or whether it’s a buyer’s market, one of the other, you need to make sure you look at these. I would even go down to the point to, I would look at every sold house in that neighborhood and see what type of finishings are in there. Okay? Because you never want to overdevelop a house. You never want to be the biggest and the best in the neighborhood. If you’re the biggest and the best in the neighborhood, you probably overdeveloped the home. You want to be somewhere right in the middle where, which is the sweet spot. right, Pete?

Peter Vexcel (49:02):

Absolutely. Absolutely. You know, guys, I always tell people that like, when you break real estate down to like a deal, really what deal is, it’s a multiple of decisions, you know, do you buy it? Do you not buy? Do you use this money? Do you use this money? Do you flip? Do you fix and flip? Um, do you do this size reservation and renovation? Do you did this size renovation, but it all starts with what Julie taught tonight. Do you even have a deal worth considering? And how do you know if you have a deal worth considering? So we hope you got something out of tonight because this is important. If you don’t understand how to even make a decision, whether or not to move forward or not, you could spend a lot of time doing what a lot of people do in this business.

Peter Vexcel (49:54):

We’re running around like chickens with their heads cut off and having nothing to show for it because you’re spending your time with the wrong deals, deals from the go where you could literally just pop in a website like Julie talked today and realize right away, this is not even a deal that I need to be pursuing ’cause the numbers, the numbers are so far off. So this is what we do with partner-driven. We teach these types of things to our partners. We help them with lead gen. We provide all the capital. Some of you guys are partners here tonight, and we’re glad you guys are here. Hopefully this gave you a chance to like level up and how you will evaluate deals. Some of you guys have been joining us for a little while and you’re like here, because you’re ready to hopefully to make a decision. Or maybe you need a little bit more information. So we have some key team members on standby. If you want to start pursuing what it means to be a partner or maybe even get started. As early as tonight, we have some key team members on standby at the following phone number. If somebody could put that into chat, 7707468585 that’s 7707468585.

Peter Vexcel (51:01):

But whether you’re a partner or hopefully a future partner, we’re just along for the ride. I know I learned some stuff today. I hope you did too, but it’s not a matter of just learning. It’s a matter of implementing. So the best that he could do was take the information we gave you today. Go make some calls to sellers, go implement this thing, go execute this thing and let’s go get a deal together. So I’ll let Julie sign off. But on behalf of myself, Julie and everybody, that’s here making all this happen. I enjoyed it. I’m glad you guys are here and I will be here ,hopefully along Julie, same time, same place next week, Julie.

Julie Muse (51:41):

Yep. Same here too. For all of you partners out there. Join me in the morning at 9:00 AM. Eastern standard time for my favorite fund with numbers, where we’re going to go over this. We’re going to go over what numbers we should be getting deals under contract, and you can ask questions live. That’s the most beautiful thing about being a partner is we’re there for you five days a week, Monday through Friday at 9:00 AM Eastern for different topics all the way across the board, but either way, have a beautiful night, guys. See you later, go get some deals, get off your butt. Let’s make it happen. Bye.

Peter Vexcel (52:16):