Thank you so much for the helpful answers. I lead the Heart of Dixie Real Estate association (http://www.Heart-Dixie.com
) and provide Rent-to-Own houses in the Montgomery, AL, area. In order to provide the best-quality housing for the least amount of money, I need to buy a home and fix it up with a total invested of less than 70% of cma for that house. I define cma as similar homes that sold within the past 6 months within a 1/2 mile radius of that house. For example, I inspected two houses recently:
1. 4031 Gaston Ave, Montgomery 36105. Heavily vandalized, I think it should rent-to-own at $550-600/month after I invest $10,000 in the rehab. Free online sources give a value of $54,000.
2. 110 Kingswood, Prattville. Sitting empty for several years, the house needs paint, carpet and repair of interior doors and walls and external woodwork. I think it should rent-to-own at $750/month after $10,000 in rehab. Online sources give the value at $80,000.
For both of these, my decision to buy will be based on real cma.
As you may know, rental homes only net $150-200/month, whether they are $30,000 homes or $200,000 homes, and that means that there is little room for error when buying homes to market at rent-to-own.
I love to give good commissions to realtors who help me to find homes to buy, or who refer clients to me.
So, this is my situation, and why having an occasional cma from reputable sources will help me to make better decisions.