ARV and the hard money lender

[Danielle Desaulniers]

Hi everyone!
I am a newbie and have just gotten my first deal. Here is my question/situation: My hard money lender had 3 independents come out to my property to determine the ARV on my house, so that he could then decide on how much money to lend me. His people told him that the ARV on my house will be $225k. The problem: Both I and my realtor comped the house at $300k! Now the investor doesn't understand the full scope of renovations but I did give him the repair estimate. Now I am worried that my new property isn't worth what I thought it was. Is this what they do to loan u less or am I wrong about the ARV?

[Andy J.]

Most likely it's a combination of the two. I don't use hard money very often but they are always on the low side of comps which obviously puts them in a better position should you not be able to follow through.

Never ever rely on your real estate agent for comps, they make money by getting you to purchase. I don't care if they're friends, family, if you've known them for 50 years and they've done rehabs themselves, never!

If you're looking at comps from 6 mo. ago then your number will likely be inflated, things have changed a lot since the tax credit went away. There are plenty of 'how to' resources on this forum regarding running comps, take some time to look through the posts and hopefully you'll be able to determine the tru ARV.