ARVs for Single- and Multi-Unit Homes

[Keenan Rusk]

I couldn’t find a direct answer to my question on the forums, so I’m hoping to gain some perspective here from other investors and agents  

I’ll regularly receive emails from wholesalers and my meetup lists advertising “value add” multi-family homes in Baltimore (specifically, single-family homes that have, in some way, been converted to 2+ unit dwellings). They will usually include a set of ARVs for recently sold, remodeled homes. Some of them may have been sold as a single family (1-unit), in which case I’m assuming that is what the ARVs is based off of. In that case, can one assume ARVs between will be the same? 

Thanks, 

Keenan

[Joe Norman]

Great question, and in my opinion the answer is Absolutely NOT. This shows the ignorance (or deceitfulness) of many "investors" in our area who have taken a "get rich in real estate with non of your own money" course but don't have a true mentor. Valuation methods are completely different for single family homes then they are for multi-unit cash flow properties. Only use 2-4 unit comps to estimate ARV on 2-4 unit buildings.