Determining the ARV from comps that are bigger

[Baylie Sappir]

Newbie here looking at a wholesale property in Philadelphia that is a shell and needs full rehab. It is a 2 bed 1 bath with 1,008 sqft. The neighborhood is changing for the better, however the renovated comparables are mostly 3/4 bed, 3 bath and double the sqft selling anywhere from 320k to 400 k. My question is how would I figure out the "apples to apples" ARV in a situation like this?

[Eric Lerman]

Hello Rafael. I'm working with Baylie. I am able to easily figure out ARV's in stable markets, but I'm finding it difficult to figure out a good solid ARV in a trending market. There are lots of new construction in the area which can't be used as a fair comparison to a renovation. However, a lot of other rehabbers are adding 3rd story additions to these 2/1 houses which is also adding a lot of square footage. So it's becoming a little difficult to determine a solid ARV in an area that is so drastically different with housing prices and values changing from block to block. Is there any kind of formula to use when there are more or less beds/baths/square footage? Or is it really just take my best guess and gamble with the outcome in such a transient area?