Determining the ARV in a tricky area

[Skyler Mckinney]

So this house has been on the market for 80+ days and I am about to make an offer on it but for the life of me can not get an ARV. The house sits next to 3 other houses that are in the same shape or worse off. None of the 3 homes have sold in the last 8+ years. Now, these three houses are surrounded by homes that start out in the low 500's. They want 165 for the house and I am hoping to get my offer accepted at 145-150. These are the last of the original houses that are over here and they are continuing to develop the area, but I can't find a comp. Opinions on how I get the ARV and whether I should do a serious high-end rehab (getting rid of an office moving the bathroom to where the office was so I can expand the very cramped kitchen/ dining room so they can be two separate spaces and then finishing the two rooms upstairs which are currently wood paneling.) Or just putting basic updates in replacing carpet and going with the three lower-end homes next to it. What would you do in the situation? This is in Virginia Beach and there are no other homes this size and age in the area.

[Patti Robertson]

Be REALLY careful with this one.  It is on a major road, and you cannot compare it to houses that sit within a normal neighborhood. The city only assesses the lot at $65,000 and the house for $47,900.  In my opinion the only reason I would ever buy this lot is if I though there was some chance the city may one day purchase it to widen the road. The house is only 940 square feet.  It also appears that the back corner of the lot is in a 500 year floodplain.  That’s a low risk, but with the flooding the city has had in that neck of the woods, you need to take that into consideration. No chance I would consider this for a flip.