Understanding ARV in deals

[Rashaniqua Cason]

So I understand how to do comps but what I don’t understand is how ARV is decided. For example I looked at a home in Hilliard Ohio that asking price was 230k there were no properties in the area that sold with exact same sqft beds and baths. This home actually haS more bedrooms then the houses that sold for around 300k in that area. The sqft of the house is even bigger then the houses that sold for 300k so how do I determine my ARV when I couldn’t get really accurate comps?

[Brad Clarizio]

Hey Rashaniqua- 

I'd recommend using the average price per square foot of the homes that sold in that area and multiply it by the number of square feet you have. But remember, there is a limit. For example, if all the houses are selling for no more than 300k, even if your house is way bigger/more bedrooms, etc., you may not get a whole lot more than 300k. Every neighborhood has SOME sort of ceiling (sometimes it's a 200k window, sometimes it's 20k). 

If you'd like me to offer an opinion, let me know. I am a licensed agent and have no problem giving you a quick opinion on what the ARV would be.

Best of luck!