Back with another newbie ARV question...

[Kavin Kuykendall]

Hey BP,

So I've got another potential BRRRR prospect in Walla Walla, Wa. This is a Duplex I'm having trouble estimating the ARV on. Lets talk about the subject:

Single level

Year: 1913 house with an added unit in 1983

Sqft: 1734 total (867 each)

Lot: 7500

Floorplan: 2bed/1bath/1laundry each unit

Since I want to BRRRR its obviously in rough shape. According to the listing there is some water in the crawl space and damage to the siding. However, this is also in what I believe to be a great area (near a park, college, and other great homes).

My question:

Since there are no nearby (within a half mile), recently sold duplexes in the area, can I just take a single family home with good comps to come up with my ARV? For example a comp could look like:

Early 1900s

~1700 SqFt house, 

~7500SqFt lot

4bed/2 or 2.5 bathroom/1utility room.

My thought behind this was if I were to own the SFH above^^ and wanted to divide it into two rental units I could do so without negatively effecting the ARV. Right?

However, because there is more competition for a SFH, I'm sure a duplex of the "same size" would have an ARV of less. But if I got a good gauge for similar SFH ARVs in the area I could at least be sure I'm not overshooting my ARV estimate with this duplex. Does that make sense? How do you deal with this issue?

As always thank you all for acting as my virtual mentors!

[Tony Wooldridge]

@Kavin Kuykendall, I have taken the liberty to run the report in my rental calculator and obviously have made some assumptions in my calculations but for the most part I thing it probably captures the important stuff. I have sent it over to you to take a look at. Remember once again because duplexes are 95% of the time owned by REI's they don't sell as readily as SFH so getting an accurate ARV is going to be fairly difficult because the lack of data. However, with that said, you will want to focus on the cashflow and ROI or what ever other requirement you seek within your criteria. So don't get to hung up so much on the ARV (as this will be different than the SFH as previously discussed above), however, ask your RE agent to help you by looking up the most recent duplex sells within the area and you may have to expand your search envelop a little larger then you are use to, once again to account for the lack of sells on duplexes compared to SFH's.

I have taken the liberty to attach an older article that Brandon wrote a few years ago.  I thing you get most of the concepts that he is trying to express in this article already but I will let you be the judge of that.  I most certainly hope this helps and as I stated before stay the course and this thing will happen in no time!  Best of luck and keep us all posted.  The article link as promised: 

https://www.biggerpockets.com/renewsblog/2014/07/1...

[Kavin Kuykendall]

@Tony Wooldridge Thank you for the insight. I'll read that blog now!