Wholesalers and inflated ARV's!

[Jacob Beg]

Hi All:

Lately, I have been assessing a lot of deals to acquire rental properties or take on a flip project/s.

Almost 80% of these deals are pitched by wholesalers, most of whom are well-established local firms. However, the ARV's are almost always grossly inflated. On the face of it, their ask can be as low as 50% LTV of the ARV in an attractive market.

I find it increasingly frustrating that there are either no comps to justify such lofty ARV's or ARV's are simply plugged out of thin air and sometimes ARV is clearly the highest house sold in the neighborhood irrespective of sq footage difference or type of house.

I assessed two deals yesterday where ARV is off by 100K on a smaller property and on a larger property wholesaler says the value is 1.3M but 1M is the figure justified by plethora of comps.

And when you revise your offer to 50% LTV of the realistic ARV, it is considered an offensive or not a serious offer.

 A part of me thinks there should be strict regulation in this area where inexperienced investors or those lacking the right tools or are impressionable may fall for questionable marketing tactics. I see this more as a misrepresentation than mere puffery. 

Am I the only one experiencing this or is this quite common?