How to determine ARV is there is no good comps close by.

[Sam Deb]

Hello BP Family,

I have a deal in Indy that is almost 5.5k SQFT but it needs rehab or you can say more than TLC :)

Looking at the current need of rehab it looks like it will be around 125K+ of rehab to make buyers feel good to pay top price. I made an AS-IS offer for the price of 150K+. I believe I will have the contract but I am still waiting to hear back. I learned that there are not many offers, may be the other buyers have the same problem as I have (just a feel good guess).

My biggest problem is all nearby SFH are about 2k SQFT and not a real comp in terms of size and feature as the subject property is 5 bedroom and 4.5 bathroom. Please suggest how to go about determining the ARV in this particular case. I have to go more than 1.5 miles away from the subject property to get good comps but so far from the subject property will not be good comps where the area is densely populated.

Looking at the SQFT of the house it will sell around 400k if I believe in the ARV of a near by house that is smaller than this and sold for 360K. But I don't want to assume anything and go strictly with numbers alone. Please suggest.

Thanks,

Sam

[Jessica Stevenson]

Do you have good relationships with any local realtors, including the one that is helping you to put in the offer?  Even if you are a realtor and still struggling with valuation, reach out to some colleagues to pick their brain.  Going more than 1.5 miles for an appropriate comp is fine, especially since this sounds like such a unique property.  Once you get some comps, adjust as necessary depending on if your area is more or less desirable.  Sounds like you're not afraid to set the standard in this neighborhood and give this home an amazing transformation - good luck!

[Sam Deb]

@Jessica Stevenson thank you, appreciate it. My realtor is also confident that the property will have more than 100K equity once fixed and flipped. But it’s a big project :)