Estimating Duplex ARV in MSP Markets

[Nick Jordan]

Hi all!

I have been playing with the numbers of a few rehab MFRs in the St. Paul area and am wondering what factors some of you prefer when estimating the ARV ($/sq.ft., comps, rent ratios, location, etc.). There's a plethora of factors to consider and I definitely don't want to over-estimate. I'd love to hear some suggestions (outside of consulting my agent) on how to improve the precision of my analyses.

There's a few properties that I believe have solid value-add potential both in the condition of the properties as well as their pro forma rents. I hope to get into one of the properties via FHA and use the majority of my capital and make improvements. In a perfect world I'll earn a significant return on the forced appreciation, allowing me to cash-out refi/HELOC in 12 months.

Any thoughts, resources, or suggestions would be much appreciated!

[Tim Swierczek]

@Nick Jordan be careful on rehabs.  The market is priced such that poor condition is currently overvalued.  I'm not saying you can't find a good deal, it's just the amount the house is discounted based on the condition is not likely as much as you will spend to bring it back up.