Estimating ARV of a Chicago area duplex, first time investor

[Bett Rogers]

Greetings,

I'm hoping to begin my investing journey with a house hack project in a Chicago suburb. When calculating ARV of a multi-family unit is there anything I need to be attuned to beyond the typical process of finding what rehabbed homes within the immediate vicinity have been going for in terms of $ per square foot? Is there a better way to predict ARV for a duplex?

The comps I'm using are primarily single family homes in the immediate vicinity. If I push farther out in order to incorporate more multi-units into my analysis I get into neighborhoods that are priced significantly higher than the area I'm looking at.  

My plan is to use this property as a BRRR investment. Asking price is 265 k, rehab is estimated at about 75-90 k, ARV appears to be somewhere between 450 and 525 k, average monthly rent for both units will total 3600. With regard to finance strategy I'm considering using an FHA loan for the low down payment in order to cover my renovations out of pocket, however, I need to research the financing piece more before I can really speak to my plans in that area. I haven't gotten that far yet!

Any advice is welcome. Thank you all!

- Bett

[Paul De Luca]

Originally posted by @Bett Rogers:

Greetings,

I'm hoping to begin my investing journey with a house hack project in a Chicago suburb. When calculating ARV of a multi-family unit is there anything I need to be attuned to beyond the typical process of finding what rehabbed homes within the immediate vicinity have been going for in terms of $ per square foot? Is there a better way to predict ARV for a duplex?

The comps I'm using are primarily single family homes in the immediate vicinity. If I push farther out in order to incorporate more multi-units into my analysis I get into neighborhoods that are priced significantly higher than the area I'm looking at.  

My plan is to use this property as a BRRR investment. Asking price is 265 k, rehab is estimated at about 75-90 k, ARV appears to be somewhere between 450 and 525 k, average monthly rent for both units will total 3600. With regard to finance strategy I'm considering using an FHA loan for the low down payment in order to cover my renovations out of pocket, however, I need to research the financing piece more before I can really speak to my plans in that area. I haven't gotten that far yet!

Any advice is welcome. Thank you all!

- Bett

Before you do a bunch of analysis on the property you should have your financing situated otherwise you might be just wasting your time. To force that kind of a value increase you're likely going to need to use hard money financing or cash since it probably won't qualify for conventional or FHA.