How do note investors determine As-Is value? What % will you buy at?

[Sam Tright]

1. Say a house is bought for $40k, $15k repairs needed. ARV $100,000. What is as is value? For a low priced house like this will you require an appraisal to determine it, or go off some desktop estimate?

2. Once as is value is determined, what percent of it would you consider as your collateral value when buying a 1st position note for say $45,000? If further details are needed please give an example and backfill your own example numbers to help me see the full picture.

[Peter Halliday]

As-IS value is how much you’d have to sell the property for if you don’t want to do the repairs.   I determine by doing a Broker Price Opinion (BPO).   Paying a realtor to take exterior pictures and looking at comparable sales.   Often they list amounts in terms of how long you’d have to wait in day    often the realtor is more local than you are.    

I don’t bid as a percentage of As-Is value.  I look at Unpaid Principal Balance.  But i looks at Loan to Value too.   What’s more relevant to me for Non-performing loans is there’s a big enough cushion between my bid and the as is sale price.  Unexpected costs come up.   The small dollar loans can have very favorable percentages.   But still not enough money differences.  In situations like that you can lose money in a blink.