Determining Fix and Flip ARV

[Brian Stuart]

Good afternoon BP. 

I am looking to get started flipping houses, but am having a little trouble figuring out ARV. I have done research and run the numbers on practice properties in more established markets, but am having some trouble in the market I am looking at investing in. How do I best determine ARV when none of the comps are flips? I'm able to find properties with similar specs, and some of the houses are good enough for a retail buyer, but I haven't seen many flipped properties.

Any help is much appreciated.

Thanks in advance,

Brian Stuart

[Andrew Garcia]

Hi @Brian Stuart, when none of the comps are flips, you can still calculate ARV.

Make sure you have similar comps then find the ones in the best condition. That is now your floor for your ARV.

If you run numbers on that, you know that it will almost definitely sell for more. That means that if you run numbers based on that ARV and it makes sense, then you should move forward. No further action is needed.

If the numbers are tight with that number, I would contact a local real estate agent that is familiar with fix and flips. Ask them what premium is typical for renovated homes in that neighborhood for similar properties. They should be able to help you with that.

Hope this helps! Let me know if I can be of any assistance.