Calculating ARV of Rental Property

[James Spevak]

Hi everyone... I have a property in Milwaukee that I am looking to do a cash out refi for and am trying to figure out how to lock down calculating the ARV. If anyone has a good process for this I would love to connect. Thanks in advance!

[Nate Sanow]

Does your state allow Zillow to show sold comps? If so, you can do the following to get a ** ballpark ** estimate of ARV:

-stay inside 1/4 mile if possible, and, stay inside 90 days 

-if necessary go out to 1/2 mile or a full mile of there are no comps same size or age in that time frame 

-make sure you filter a similar sq feet range.  For example, 2 bed 1 bath houses below 1000 sq ft are a VERY different asset than a 3/2 house with a garage….

-look at 3 of the MOST ideal comparable properties and what they sold for.  Now, write down the price per square foot.  Add up the 3, and divide that total by 3.  Take that PPSQFT and multiply it by your square feet.  

-find a good Realtor in your area who is willing to verify your numbers or point out what you did wrong…even if you are buying off market, a good Realtor who understands investing won’t take that personal and will probably be willing to help you ** IF ** you are planning to eventually do business with him or her.  

I hope this helps.  Nothing is perfect but this is a good way to start.