Scaling up: How are you calculating a Fast and Accurate ARV?

[David Sohn]

Question for all you house flippers and investors that have scaled up your business and put systems and/or software in place to analyze lots of inbound deals..

How do you quickly and, more importantly, accurately analyze a potential property for a solid ARV?

We currently use a google spreadsheet that pulls in MLS info and Zillow info automatically and it auto-populates ARV using 90% of the Zestimate (I know...yuck...but it's at least a quick and dirty number that enables us to know if we want to dig deeper). My issue at this point is I just don't trust that number enough and find we are always over-riding that number to adjust the ARV.

My business partner, @David Corey and I are both agents and have access to MLS - so we will then run comps and do our standard CMA that way to refine things - but it takes time to do it accurately and not practical to do 10 of these when you're trying to scale up.

There's got to be a better, faster and equally or more accurate way...has anyone had any luck connecting MLS data via IDX APIs or anything like that?

Interested to know how others tackle this problem! Any and all advice welcome!

[Jeremy Pakalka]

@David Sohn The only quick and accurate way is for you to check the MLS for recently sold comps. The main areas of concern are square footage, year built, and the number of bedrooms and bathrooms. I then look at the sold comps only (not pending or asking price) because that is the only true way to have real data. You also need to do the same search going back 3, 6, 12 and 24 months to get a feel for any trends (up, down or none). You also need to make sure all the comps you use are sold conventional (FHA or VA) and not cash or owner finance. Of course, the comps have to be in the same neighborhood (same schools and not crossing any major roads). That is the basic way appraisers do their first steps in the process. It should only take about 5 to 10 minutes per house. Also remember to not get emotionally attached to a house. Look at the numbers only when finding an ARV.