How to Underwrite a Loan Using Comps

This podcast shows how we evaluate the margin of safety in a single family rehab loan, using actual comparable sales in the neighborhood of the subject property. We pay attention to the loan amount per square foot, as well as the total loan amount on the property. To ensure a margin of safety, we look for the loan amount per square foot to be substantially below the sales price per square foot of nearby properties. We also want to see the total loan amount well below the recent sale prices of comparable homes.