What is the standard when using comparables based on the ARV?

[Vincent Felder]

I'm in Atlanta and other wholesalers are bringing me properties with their ARV. So, I research what they think the ARV is and I'm not seeing what they are seeing. The hard money lenders I use require an appraisal before they back anything. I'm use to going back 3 months of properties sold when I'm looking for comparables, and not exceeding a mile in distance from the subject property. I realize that I may have to go further in distance or going back 6 months when property was sold. Are there any other indicators that I need to use in determining the ARV for a particular property? Example: subject property 80K. ARV: 200k After my research im finding property that sold for 150K or less and sometimes not even that high. It may 100 to 115k. Am I overlooking something? We have areas that are going through major changes, but I can't justify buying the property if the ARV isn't there. So again, am I over looking something that's causing me to not see what they see?

[Bob Okenwa]

Simple piece of advice: never trust wholesalers when they tell you what the ARV is. Always do you own research as wholesalers have an inclination to inflate ARVs and underestimate rehab costs to make deals look better than they really are.

As far as determining ARV, it's more of an art form than anything scientific. Someone may value a bedroom at 5k, another at 7k, and so on. Do your best to find as many like-for-like properties (same beds/baths, close sq. footage, etc) as you can and go from there.