Jan 15, 2022
We don’t get many breaking news headlines in real estate – much less in the real estate investing world. In fact the general public didn’t notice this at all, but this week we had a minor earthquake in the investing world. Third party data providers lost access to failed listing and sold property data. What does it mean, who is affected, and how should you deal with this - today on Flipping America.
Panic is never a good first response. But it’s understandable when you unexpectedly lose a major tool that your business relies on. And this is why your business should never rely on just one tool or one platform. If your entire operation is based on a technology owned and controlled entirely by someone else, your livelihood is in their hands. Amazon third party sellers are unwise to stake their lives on the Amazon platform. I’ve seen sellers lose their ability to sell for a variety of reasons - none of which were their fault. I’ve seen sellers sell the same product for months or years and suddenly be told they can no longer sell that product. Or worse yet, Amazon decides to sell it. I’ve seen people build a nice following on Patreon and YouTube only after taking a position those platforms don’t like, become de-platformed or de-monetized.
I do not and will not put all my eggs in one basket. I don’t talk about this much but I work hard to develop multiple income streams. At the moment they are all generally in the same field, but that isn’t the long term plan. I’m not going to talk about that today because all of this is leading to one simple statement: If you are completely dependent on Propstream for your real estate business, you are probably unwise.
Propstream announced this week that due to some changing regulations, they will no longer be allowed to provide information on failed listings or sold properties. Failed or expired listings is but one of over a hundred possible data points from which to build a marketing list. And it’s not one of my favorites. If a listing expires without selling - especially in the past three years - it’s almost always because the seller is asking too much. I’ve marketed to this list in the past, but don’t find many who are willing to lower their expectations simply because the listing expired. So this really isn’t a big deal.
The lost of sold comps is a big deal - a huge deal. We run comps based on sold properties. This is without question the most reliable way to know what your potential investment is potentially worth. This data is essential for appraisers, lenders, and even tax assessors. Well guess what, you can’t really develop a solid “after repair value” without sold comps.
Or can you?
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Announcements:
- $150,000 giveaway.
News and Resources:
- Some thoughts about the so-called non-disclosure states: https://www.oceancitytoday.com/business/real_estate_report/several-states-do-not-disclose-sale-prices-to-public/article_31fe9010-9dab-11e9-bf92-cb9ad3f9d4ec.html#:~:text=But%2C%20there%20are%2012%20states,not%20available%20to%20the%20public.
- This is a very nice summary of non-disclosure states and what to do with them. https://retipster.com/non-disclosure-states-map/
- The WSJ weighs in on non-disclosure states https://www.wsj.com/articles/the-states-where-home-prices-are-secret-11560956939
- You can get Privy. They are not affected by the data loss: Privy: http://bit.ly/getprivyprogram
Mindset Moment:
What should you do if you don’t have access to the sold comps?
- Simply enter the address into your search engine. Look at several links, see several opinions about the value. If they are all similar (but not necessarily exact), you might have a good number.
- Look at your subscription data providers - Privy, PropStream, Batchleads, ets. And see what they might say.
- Develop a relationship with a realtor in your target market. The best way to do that is make them some money. Don’t ask them to run your comps. Ask them to look at your work and see whether they agree. It’s almost a certainty they will know more about the local market than you will.
Questions from Listeners:
- Lydia, St. Paul, MN, “Our city is experiencing a crime wave like I’ve never seen. I want to sell all of my rental properties (I have 9). But where could I put the money?
- Cameron, Chattanooga, TN, “My partner and I just had a falling out. We own 17 rental houses and currently have 3 flips together. We don’t want to be friends any longer but both of us are fair-minded and want to divide the assets as evenly as we can. Can you offer any guidance?”
- Sidney, Austin, TX “Where are the opportunities you see in a tight market in 2022?”
- Grant, Macon, GA “I want to do this! I’ve been watching a show {name of show removed} on TV and I want to get into the business. I found your podcast and you seem to be a guy who can help me. What do I need to do to get started? I have a decent job and about $10,000 to invest. I don’t hate my job but I hope I can transition out to this as a career.”
- Jenny, Port St. Lucie, FL “New year, new me. I’ve set some big goals for 2022. I want to acquire 3 rental properties this year and need some advice. 1. Should I try to buy right here in my local area and if so, how do I find possibilities? 2. How do I know a particular house is going to be a good investment? Thank you in advance for your time.”