What is your method to determine ARV for your flips?

[Sean Youngberg]

So newbie here and trying to learn all I can. I've been trying to analyze some deals, but getting caught up trying to determine an accurate ARV.

I've been working on a spreadsheet I modified to do CMAs. My first problem is determine the number to use for adjustments (Age, Lot size, BRs, patio, etc). I understand no one can tell me these numbers for my market, but what did you use to learn some rough numbers for your first couple of flips? Or do you even do this type of CMA in the first place? Is this something I should be relying on my agent for?

Also, any tips for determining condition and level of finish for sold comps when there are no longer pictures posted or relevant details in the listing?

Thanks for any advice you can offer!

[Manny Cirino]

@Sean Youngberg seems like you are trying to get a hard number. Comps are usually rough and approximate numbers to guide you. The best thing to do is to reach out to Realtor and have them do this for you. Most Local MLS sites provide you with an option to do it yourself.

Here is what I suggest if you are in a dense and populated area where houses are close to each other. Use the price per square foot method.

1. choose a few comps surrounding your subject property(about 3-5 houses) recently sold for ARV/Retail value.
2. Match- the year build(give or take 5 years), Sqft.(give or take 200sqft), beds, baths, garages, pool, condition of the house sold
3. calculate what the houses sold for and find out what the price per sq.ft. was (price sold divided by sqft= price per sq. ft.)
4. Take the average of each Price Per Sqft. and average it out
5. multiple the average price per sqft. times your subject property and that is your ARV

Example:

Subject Property: 3/2 1,500sqft. built 1972

Comp 1:  3/2 1,300sqft. built 1975 sold $145,000 price per sqft $112

Comp 2: 3/2 1,700sqft. built 1972 sold $155,000 price per sqft $91

Comp 3: 3/2 1,450 sqft. built 1977 sold $135,000 price per sqft $93

$112 + $91 + $93 / 3 = $99

$99 X 1,500 sqft. = $148,500

A.R.V. = $148, 5000