How We Built an Investor Tool to Analyze MLS Deals FAST with Taylor Dickerson

Are you struggling to gain real estate clients? If yes, this video can help you! Learn how Taylor Dickerson, an agent in San Antonio and owner of The House Hawk, and I collaborated on an investor tool to quickly analyze on-market deals through automation.

Transcription

Ariel Herrera 0:00

again. Awesome. So I want to start this. Right. Welcome, everyone. Today, we're going to be going over an investor tool that I've built with Taylor, who is an agent out in San Antonio. Welcome Taylor to the channel. Hey, thanks for having me. Yeah, super excited as part two and finally get some exposure to the tool that we've built together. So right now handed off to you just maybe give an overview of what is it that you were initially looking for? And maybe, first start off with the spreadsheet that you previously built? And then we can go into how we were able to create a tool and what it does,

Taylor Dickerson 0:41

okay, sure, yes. So, essentially, what we wanted to do is, we wanted a quick and easy way to analyze all of the properties that are on the MLS here in San Antonio, because we've known from past experiences that we can pick up great deals on market, a lot of investors think that the only deals are off market deals, which is couldn't be further from the truth. I mean, if you have the right realtor, you can find some excellent deals on the market in the MLS. Main reason for it is honestly, a lot of realtors are brand spanking new, and they don't know what they're doing. And they just say, Yeah, sure, let's list it, whatever price and it's completely wrong. But there's also just a number of realtors to that, like they don't have an investor base. So if they have like, I don't know their aunt, or somebody who has a old junker house, their aunt's gonna call them up and say, Hey, you're a realtor, you want to sell my property. And they're like, sure, but they don't have investors, they don't know how to go and, you know, put stuff off market to market those people. So where do they put it, where they put all the rest of them and even good houses, so they put it on? Now the problem for us and investors is that there are hundreds of houses on the MLS, I think like in my last poll from the San Antonio MLS, it was about 1800 houses. Now, I know a lot of realtors, if you're smart enough or astute enough, what you can typically sometimes do is come up with a bunch of keywords. And then you can search the descriptions that are written by the realtor's for a lot of these properties to try to match some of those keywords and then bring those back. And hopefully that helps, you know, isolate it down to a manageable level of houses to look at. But even then you still have to go by hand and run the numbers for all of these things and try to still figure out which property works and which one doesn't. And that takes a significant amount of time to do by hand. So what we decided, though, was that, you know, what if we just get rid of that description thing, because even then what you're relying on is a realtor out there to use the right words. And some do some don't, some might just take the worst house and write the best description for it the possibly can. Like this is a beautiful house, it's got everything you might ever want. Call us today. And then you go look at the pictures. And it's like, yeah, it's got everything I want, like, except for a sink and a bath. Yeah, livable space. But so you would miss that, you know, and those are actually great opportunities. Because when those deals pop up, like that's the stuff that every other realtor that's out there using these keywords is gonna miss. And so you get minimal exposure on those. And now you're like the only person seeing it, and it's easy money. So what we decided was let's just take our entire MLS and see how we can somewhat automate the process of coming up with indica a financial ratios and indicators for weather. And I mean, a lot of my investors have different needs, like some of them are looking for rental properties, some of them are looking for flips. So what we did was we talked to all of them and said, you know, what are the financial metrics you look at, in order to make investment decisions? And most of them I already knew what they were, but some of them I was like, you know, what about this? Like, have you ever thought about maybe looking at like this, like, you know, it's an interesting way, let's see what happens. So anyways, what we do is we got together, came up with all this financial metrics and just built out an Excel spreadsheet on how the math was to work behind them. And

Taylor Dickerson 4:38

then it was a matter of really trying to get the the ARV s for a lot of these things and trying to figure out what like the rental values were for these things on a massive scale. And that's that was really where we brought you and I guess to say the least is to say like hey, where can we possibly get all of this data to help us, you know, put the last piece of the puzzle together to figure out if these financial metrics are working for any of our clients. And yeah, you you went through as you basically already knew where to get all this information, you just like, Okay, you can get it from hearing it like this, you can do this. So ultimately, we partnered with you and decided to get this whole process as automated as possible. And now we've got it's where we just get our base spreadsheet that we you know, extract out of the MLS, we drop it in the tool that you built, and it spits out the entire output, which all we then have to do is just filter by our clients preferences to figure out which properties on the MLS meet their criteria, and then we just send it over to them. And they say, Hey, now I need you to put in like 30 offers tailor. And I'm like, 30, Uni 30 offers no, like, yes, and there goes two days. Yeah, but then, you know, I've also got some separate tools now that helped me Automate, you know, all of my offers, so I can knock them out really quick. But yeah, so. But that's, uh, that's it in a nutshell. I mean, the tool that you built is phenomenal. How would you like to go about maybe showing it off a little?

Ariel Herrera 6:21

Yeah. Would you want to share maybe the input that you usually put in? And the columns that come out afterwards? Yeah,

Taylor Dickerson 6:28

yeah, sure. Let me

Ariel Herrera 6:34

curse off. Just to say, like, so impressive, the Excel file that you had originally brought over how you were analyzing deals and all the data that you were ready to bringing in, like, from Zillow, and some other outside sources. So really impressive. Your Excel skills? For sure.

Taylor Dickerson 6:51

Yeah, absolutely. I mean, like I said, I started off, you know, briefly in that corporate world, doing analytics and stuff like that. And, you know, especially with the stock market, you have this exact same type of too much data problem. And whenever I was in college, doing my finance degree, you know, like, I would, I would look at all these stocks, and I'm like, how do you isolate? What's the best stock? Like, I know how to do the, you know, the math behind all of it to figure it out? But how can I do it quickly and easily, because time is money, and it's speed to the lead, who can get there first. So that's where having a good, like, fundamental knowledge of how to work with spreadsheets, how to do very in depth formulas. And, you know, I mean, I'm a big Excel fan. I know, I think you use Google Sheets, which I'm not as familiar with, but I mean, it does basically the same thing. So as long as you have some fantastic knowledge and some sort of, you know, progress, like not necessarily programming language, but just in some kind of formula based Yeah, tool, then, you know, you should be off to the races. But that's something that I highly recommend to anybody to, you know, really sit down and study Excel or Google Sheets or something. You can learn the math, but you got to figure out how to do it on a massive scale in order to figure out those one or two little easter eggs that you're going to want to try to find. But okay, so I have the the extract from our MLS up, let me do should I share the screen with you? Or yeah, if you don't mind? Okay, let me see. In one, share,

Ariel Herrera 8:38

sure. And most people probably wouldn't even be as familiar if they're not an agent of what comes out from the MLS. So if you could also just give an overview of some of these fields, too, that will help.

Taylor Dickerson 8:48

Yeah, absolutely. And so one of the things too, is that every MLS is a little bit different. The particular board that I'm a member of which is the San Antonio Board of Realtors, our MLS is pretty nimble, it allows us to do a lot with it. I was a member, a couple of other boards, which are a lot more complicated their whole interface and everything. So I kind of got lucky with San Antonio being as easy to use and user friendly as it is. But even to that extent, it's like I still want to do data manipulation that I can't do with the San Antonio board. So it's like the MLS so I need to pull it out of the MLS and then take it and do my own thing with it. And that's really where you know this came in process. So essentially what I did was I just set up a view in our MLS system that will consistently export these fields. These fields, just to give you a real quick rundown. So the status is just the current status of the property, the MLS IP, days on market, cumulative days on market, the original price, the current price, the price per square foot The sold list which I actually only have that field in there, because in the actual field, the actual sheet that I use all this for, I have a formula in this particular column. And so I just needed something to create this column so that it would be blank so that I, whenever I get my output back, I can just copy and paste it and chat, I don't have to worry about it. Technically, there's other ways to do it. But that was the easy way I came up with it. Now I actually don't even do that I just copy and paste what comes out and just drop it into my current sheet. But it was the street number, the street name, the unit number, if it's condo, the city, zip code, subdivision name, the type of property whether it's a one story, two, single family, condo, Cetera, the foundation type bedrooms, bathrooms have bathrooms, square footage, your bill size of a lot occupancy, association transfer fees, that's for like he always, HOA fees, which is their monthly dues are how often they are due, which is actually destroyed in the next field, the payment frequency field, and then finally, the total taxes. And some of those things are really in there more to help filter the final results. Because some some investors, you know, they might, they might tell me like, hey, one of the criterias that I look for is I don't really like houses that have pier and beam for example. So for those investors, at the end, I'll be able to filter those out. Or some investors are like, you know, we, we don't like houses older than 1950. So I can filter those out. Some of them only like certain zip codes, you know, so we have the zip code in there, in order to filter them out. Obviously, we need the address because we got to tell them where it's that the bedrooms and the bathrooms like that's all great information. I think that kind of helps sometimes and being able to establish what the rental value might be. But as far as like the ARV, I typically only base ARV on the square footage, because, you know, in San Antonio, again, we do have all those investors that come in there and flip houses. And when they do that, sometimes they'll knock down a wall, sometimes they'll add a wall and turn a three bedroom into a four bedroom or vice versa. And so it's it's like the bedroom bathrooms, they don't really make or break value as much as just the overall square footage at Mako. Yeah, and then with oh, sorry, good.

Ariel Herrera 12:36

Yeah, so am I also asked, so you have original price as long as the listing price. So what what would be like interesting when comparing those two fields to sugar.

Taylor Dickerson 12:47

So that really is to find drastic changes in price. So just real quick, after looking at this, I look at this on this one started their list price at 200. Now they're down to 170. So I mean, pretty large price drop there. And actually what I use this field for this, this blank field, I actually use it to calculate the percent difference of price. So you can kind of come up here and figure it out, like which who's really dropped their price a lot. So here you see one, they've dropped in price 25% Holy cow. So that tells me immediately either they very severely mispriced this property which if that's the case, that tells me not only did they miss price the property but maybe the realtors not really all that astute, you know, man, that realtor just doesn't know what they're doing, which that's also an opportunity because then not that you want to take advantage of them. But you can kind of, you know, figure out like, Okay, if they don't really know, their stuff, I mean, really, their job is to work in their best interest of their client, my job is to work in my best interest in my client, I'm gonna go to my client be like, I don't know that their realtor really knows what they're talking about. I feel like again, not to say I'm taking advantage of them, but I am maybe say there might be an opportunity that we can pick this property up for a pretty good deal. But then also, depending on the days on market, so you can almost even kind of come up with another formula to if you want. I mean this just came to my head they might try to work on later. But try to come up with a formula to where I also add in like a multiplier by the days on market. Yeah. And say okay, this this house has only been on the market for a number of days, they've already taken this much of a price cut. This might indicate that this person's getting desperate and might be sorry, just needing as soon as possible. Like maybe they've already moved and the house is vacant, which is also why I have this field over here the occupancy field but so maybe they they just need to get rid of it. They're they're paying two mortgages now and they don't want to keep putting that forever and they might be open to making a really good deal. So I'm betting like a motivated seller calm Exactly, yeah, for sure. And so that's, that's really kind of why I have the original price versus the list price there. The HOA fees and the taxes, those are used for other things that we end up doing in our final output to try to establish, you know, what the actual numbers or estimated numbers might actually end up being for the profitability of the investment or the ARV, and things like that.

Ariel Herrera 15:36

Gotcha. So, so now transitioning over to you have this file, initially getting some data was either not available, or it was a tedious process. So how has a tool help in terms of the columns that it now brings in that you can helps you analyze ARV and some other attributes?

Taylor Dickerson 15:57

Yes, so this is kind of what we do with it at the end. We we get we send it through the program that you developed. And essentially, that gives us a number of key fields. I don't know if I have an output file, and it's even an output file queued up. Might take a minute to open, but yeah, sure, eventually the output file. It just Yeah, I don't think I have one. But I can

Ariel Herrera 16:33

I might be in the, if you go to what when I sent you the link, and then if you go to output, there should be.

Taylor Dickerson 16:42

Yeah, there we go. I think I clicked on the wrong thing. Okay, perfect. Um, all right. So essentially, what the output file does is the output file goes and pulls all of these properties, and pulls up the estimates from them from various sources for what their their a RVs are, which just for background information stands for after repair value. So after the house should be all fixed up, what do we think it would sell for if the property was in excellent shape. And so there's a number of different sources that you knew about for us to tap into, to give us what their estimates are for the values those values. And so what the tool does is that essentially goes out and retrieves all those values from all of these sources, and then brings them back to us so that we can then plug them into our sheet, which then does all of the computations for every single property that we have. And one of the other things that we also kind of started to do was we essentially wanted to figure out what did the house sell for a long time ago, whenever the original owner bought it? And how much does the market move since then, and then applied that back to, to more or less convoluted estimate of what we think it should be worth today based off of that. And so the tool eventually kind of helps us do that as well. So it's just another version of an estimate. But essentially, we come up with all these estimates. And then finally, we land on like a median estimate or an average estimate for the property's values. From there, we go through a number of different calculations. So we do like a percent of the ARV, because a lot of the investors look for like a certain percentage of the air of bees, what they have in the property up for the we also look at the rental values of each property and we say, you know, what is the average rent per square foot? You know, what, what's the amount of rent that we're needing to turn it over for, in order for it to make a profit, the rent to price ratio, and a lot of investors look for that 1% rent to price ratio. Some of them are looked for other metrics, like what's the needed price for rent. So that's, that's a proprietary formula, we can't really disclose but it's a formula that essentially says like, given the rental value, this is the number that they need to pick it up for for to make sense, right. And then also, we actually take in every single actual value we come up with so the purchase price, the title policy, the title fees, the HOA fees, survey, Home Warranty, financing fees, mortgage loans, downpayment, everything, and we use all that to compute the financials for the property to ultimately arrive at the net operating income and the cap rate. So that we can pitch them to our investors and say, Listen, this is a this is a cap. And then we show them the numbers behind it. And they, they love it. They get excited.

Ariel Herrera 20:07

Yeah, absolutely amazing spreadsheet.

Taylor Dickerson 20:10

Yeah. And then it just keeps going on, we were able to compute the cash on cash return the net income after tax, cash in cash or return after tax, because that's another thing. I think a lot of people, whenever they compute these numbers, they don't take into consideration the tax benefits of properties as well as the depreciation and stuff like that. So we also made sure to bring in that and to kind of factor in the tax. Now, obviously, sometimes these are going to be guesstimates in a sense, because everybody has different tax rates and different situations apply. So like while I can't say any of this is actually financial advice, or legal advice, or tax advice, whatever, I can at least give you more or less just a ballpark. I mean, take it definitely run your own numbers and confirm for you know what it is, but this helps us at least isolate which ones on the surface look like they should work, right. Yeah. And everybody has different mortgage loans that they can get or different interest rates, they're offered different downpayment requirements. So I mean, everything is a little bit subject to each individual investors, you know, own personal situation. So I mean, and we are able to customize all of our inputs per investor situation as well, perfect. So, you know, if they, if they give us all the input numbers that we need, and we can plug them all in there and be like, based off our our numbers and our calculations, this is what it should be for you. Again, don't hold our feet to the fire. We're just coming up with formulas and saying this is what this says you write your numbers and confirm all that. But this at least will help us guide you to, hopefully a house that does work for you. Instead of having to waste time and look at 1000s of properties that don't.

Ariel Herrera 22:03

Yeah, this is tremendous. I mean, it's difficult for anyone, let alone even like investors who have the knowledge to be able to really pinpoint which properties to go after. So having an agent that has something like this in place is really just the knee. It's like mind blowing. And that's available. So I have two follow up questions here on the one front, by having a tool that automatically pulls this data, say for 1000 properties at once. What would you say is like the time savings there that if you were to have to search for that, for each individual property?

Taylor Dickerson 22:42

I mean, it wouldn't be possible. Can I just say that? Yeah. Like, I mean, because what I mean by that is that you would, every deal, by the time you would find it would be gone, you wouldn't have the ability to find the deal, and then have it still there. Every good deal that shows up on market is it gets picked over pretty quick. A seller before I'd like the speed of the lead on these things is critical. So that's really what allows us to to leapfrog over everybody else is that we are able to quickly hone in on what we what we need to what works.

Ariel Herrera 23:31

Definitely. Yeah. And then on the second end, I've seen a lot of spreadsheets to help investors but they're never like at the scale. So did you use or like look into how people evaluate like commercial deals to give you ideas? Like how are you able to like what kind of knowledge or resources did you bring in to construct this as a whole.

Taylor Dickerson 23:53

Um, so a little bit to an extent I did use some guidelines from commercial deals. We a lot, and I've said it before to be YouTube is a fine, fantastic resource for learning information. And whenever I was first getting started in real estate, I definitely watched I don't know how many YouTube videos and I would just anytime anybody said something about real estate or math related to real estate or how to like look at properties like I would pull up a spreadsheet on one computer and have the YouTube video on the other computer and I would just try to model what they're doing. And in a lot of a lot of these YouTube videos I did notice they would leave out like one or two things and I'm like those one or two things you guys left out were like significant Yeah, and usually that was the taxes or HOA stuff or just you know something small but it does make a difference. HOA nearly not so much but tax is usually in the interest is the other one and sometimes it would be again And I guess every state is a little different on the way they do taxes. Texas is a big property tax state. So that's where they really get us, because they don't charge a state tax. So I mean, maybe whoever was filming those videos, property taxes wasn't as big of a deal in their particular location as much as it is here. But also just the title fees and stuff like that. And the closing costs, like, you know, a lot of people they didn't they didn't accurately do it. They just kind of like, oh, yeah, it's like, one and a half percent, we'll just say, as closing costs, which for the most part can be correct. But, you know, I wanted to be as accurate as I could with my numbers. So yeah, you know, that's, that's really where I got down and dirty and just started making stuff. And, you know, originally, I think, when I came to you at this idea, you know, we didn't have nearly as many columns. And then now we have over. I mean, the last column on this thing is column F you. I mean, there's a lot of different columns. But yeah, we're doing a lot to find just, you know, a few properties. It's really what it's all about is doing as much as you can as quickly as you can to find the one or two properties that make it all worth it. But yeah, that's that's pretty much it. That was that was the idea. And I mean, like I said, when we came to you originally, the idea was not to have nearly this many columns, it was probably like, maybe 30 columns. And the next thing we know, we're just like, oh, wait, what about this? Oh, wait, yes. Oh, yeah, we need this. So

Ariel Herrera 26:35

yes, yeah, that will be able to be flexible and increase the scope if needed. But overall, Taylor's pleasure, thus far collaborating on this project, looking forward to collaborating more. And, yeah, in general, this is really, really awesome stuff. And it really shows your skill of being an investor friendly agent. So for those who aren't aware, how can they reach out to you if they want to potentially purchase something in San Antonio as an investment?

Taylor Dickerson 27:01

Yes, so you can reach out to me at the house talk.com. That is going to be our website where we service everybody buyers, sellers, rentals, investors, everybody we take everybody's through there. All that it really is that website is it's just a you give us your criteria of what you need to do, and we'll find it for you. The other way you can reach me is going to be you can call me on my cell phone. I'll give up my cell phone number just please call me at midnight. But it's 210899 hawk. Easy to remember to 108994295 you can always email me the house hack@gmail.com. And that's that's really about it. I don't really do social medias though, surprisingly. So I try to try to get on breaking. Yeah, I don't tick tock I mean, maybe that's a 2022 thing. But for now, it's just those three things email through the website or call me on my cell.

Ariel Herrera 28:05

Perfect. So reach out to Taylor, if you have any questions. And if you're looking for other clients solution, it's pretty similar and gathering data and really being able to make good investment decisions based on your area then please reach out to me and my team analytics area and thank you so much.

Taylor Dickerson 28:20

Absolutely. Thank you so much, Ariel. Awesome.