ARV value who does it?

Question

So I am looking to house hack with a duplex soon but I am looking to see at the brrrr method. So I just wanna know who and how do they determined the ARV value?

Joe Villeneuve · Answer

...and everyone involved will come up with a different number.  You need to learn how to come up with your own, since all of your offers should be based on what the property is worth to you.

Jordan B. · Answer

Joe Villeneuve is exactly right, everyone involved in the process will give you a different number.  As previously stated above spend hours looking at properties on the local MLS and learn to see a few things quickly.  Obviously price, but other factors such as DOM (days on market).  You may find a comp that seemed to sell high, but it was on the market for 200 days.  Learn to read that data to the point you can do a quick walkthrough of a property and are able to "ballpark" a value quickly and confidently.  Even bank appraisals are not a great baseline, since 2008 you will almost always get an appraisal that is within 3 percent the purchase price on a purchase agreement.  So in a nutshell, it is like any skill, take the time to study and learn the values in your area.  Below you will see a few things to familiarize yourself with, though not a comprehensive list.  Days on market, list price, school district, year built, sq ft, property taxes, and selling price.  Hope this helps, always glad to dive into more details or answer any questions Victor!

JD Martin · Answer

Well, it's more of an art than a science, but more or less: the ARV is what a similarly rehabbed house of the same approximate size, geographic location, and amenities would sell for/has sold for. The last part is a moving target, especially these days, but unless you live in a really small area you can usually find similar houses that have sold, compare how well they are fixed up and where they are, and get a pretty good idea. If you can't, then you probably aren't familiar enough with your market to be investing in that area. There's also ways to make allowances for houses that are slightly larger or smaller than yours or in slightly better or worse areas if there's no great comparable sold properties in your area.

Victor Funes · Answer

@JD Martin thank you

Victor Funes · Answer

@Tony Gunter thanks I will look into it

Victor Funes · Answer

@Jordan B. Thanks for detailing so much I sure will ask you if anything. Thanks a lot!

Victor Funes · Answer

@Joe Villeneuve thanks a lot

Tony Gunter · Answer

@Victor Funes

I get on the MLS and start researching similar properties and closed sales of similar properties and come up with a $$ feel based on those similar properties.

Basically my own BPO/CMA.

ARV value who does it?

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