Please teach me about arv

[Mary Jay]

hi guys, on a big time crunch between 40 hr job/driving my son between his sports activities/orthodontist/doctors and pre school errands... so I apologize if my question has been answered in the past already...I hope u will forgive me my lack of research on that subject...

So if I am buying a fourplex and it cost 250k, then it needs 20k work, then how does the arv value calculated?

Arv has to be at least 70 Petcent ... is it 70 percent off 250 k or 250 plus 20k ?

[Alexander Felice]

ARV is 'after repair value'

this is the value of the property once rehab is complete, and the number an appraiser would give for the unit.

ARV for that 4plex will be determined largely by comps, meaning essentially, it's worth what the same property next door sold for.

the ARV is independent of your cost, or the cost of rehab. It's set by the market rate, you base your purchase price off ARV, not the other way around. You need your purchase price and rehab to be set off ARV, you'll need to decide that number first.

LTV must be 70% of ARV, what you're saying is a bank will loan you 70% of the property value at completion. So if the property is 250K and the rehab is 20K, your all-in cost is 270K. The ARV will be a completely separate number, and they will loan you 70% of that number, regardless of what you paid.

always find ARV and start there.