How To Win With Real Estate...
Lesson #6

"The Check List"

To this point you've had a chance to become very familiar with your investing area. You've visited over a dozen open houses in various neighborhoods. You now have a pretty good idea of what homes are
selling for.

Here's a tip: Keep track of what each home is selling for based on its cost per square foot. At an open house the agent will be able to give you a fairly accurate square foot figure for that home. Subtract 10% (or whatever the going discount seems to be) from the offering price. Then divide the price by the square footage and you have the cost per square foot.

$150,000 divided by 1700 sq ft = $88.24 per square foot.

If you do that with every house you visit it will give you a general way to establish the current market value of most houses in your area.

This idea does not work with homes that have special features like a swimming pool. If you can estimate the value of the pool you could subtract that number from the offering price and the formula might work.

Remember, it would be an ESTIMATE. A general idea about whether or not the offering price is in the ballpark. It is not necessarily the price you would pay. The true value of any property is what the seller will sell for and what the buyer will pay!

YOU'VE FOUND ONE!

During one of your "Strolling For Dollars" walks you have discovered a family that needs to sell quickly. Daddy has been transferred and time is running out to sell the home.

This is it! You have what every knowledgeable investor is looking for - a motivated seller!

Remember, you have been collecting information on homes in the area, so before you even visit the home you
have an idea of its value and most importantly what you might be willing to pay for it, depending upon the type of deal you could negotiate.

You talk to the home owners and then you do a careful walk through inspection. On your walk through you use a check list to judge the important features of the home.

FIRST LOOK CHECK LIST

Address______________________________________
Date___________________

1. Rate the location:

Excellent, Average, Below Average

2. Is the type of property in character with the neighborhood?

Yes No

3. General physical condition relative to the neighborhood:

Better, Average, Worse

4. Overall exterior physical condition:

Poor, Average, Good

5. Layout of rooms or apartments:

Excellent, Suitable, Needs revision

6. Overall interior physical condition:

Poor, Average, Good

7. Major components:

A. Roof - Looks OK, Looks Bad

B. Plumbing - Looks OK, Looks Bad

C. Electric - Looks OK, Looks Bad

D. Heat/Air - Looks OK, Looks Bad

E. Appliances - Looks OK, Looks Bad

F. Basement - Looks OK, Looks Bad

G. Insulation - Looks OK, Looks Bad

8. List amenities:

9. If income property, do present tenants appear:

Excellent, Average, Below, Average

10. Does property warrant further consideration?

Yes, No

Use other side for detailed comments:
...............................................

(This is an example of just one of the check lists you will be using.)

Use this form to add to your knowledge base. Use the back of the form to write down both the asking price and if you don't buy it, the sale price. How does this sale price fit with comparable properties currently listed and with others recently sold? This type of information will grow as you look at more properties and will become very valuable to you.

Here are great resourses for profiting in real estate...