Due Diligence Question ; ARV South City STL Duplex

[Domenick Booker-Pomata]

 My partner and I are under contract for a SC duplex; 5911 Michigan Ave, Saint Louis, MO 63111.

Our contractor walked the deal and the rehab numbers match. We are having trouble with the ARV. We were confident the ARV was 140K, but we recently had a conversation with a HML and STL investor when shopping for loans.
He kindly advised us to check the ARV 140K . He has a duplex a couple of blocks away that is slightly larger and it appraised for 110K. He admits to incorrectly timing the rehab completion and had the appraisal conducted before the AC was installed and fully tenanted.

We had a desktop appraisal completed and it came back at 150k. I personally do not think the comps are apples-to-apples because our subject property is unique.

What do you estimate the ARV for this property to be? Any insight would be great.

Thanks,

[Kathy Henley]

@Domenick Booker-Pomata Contractors know how to rehab, but not sell. You would benefit by having a real estate agent on your team. Recent sales are tracked on the MLS. This address is not in south city, where the young people want to eat and live, as your headline implies. This is the Carondelet neighborhood, right on the border of the Mount Pleasant neighborhood; much rougher turf. The google 2011 street view is better looking than today's zillow listing.

Successful hard money lenders know the pulse of the market. They don't take risks and you shouldn't either. Dig further.

City-Data.com tells us that the median HH income of this area is $34,200. My leasing experience tells me area rents are $450/month for 1bed units. Consider this when deciding what you will to do with the property.

A house may be unique, but the neighborhood speaks louder. Ask yourself, will the upgrades pay for themselves? Is this the best use of your hard earned money? Or, ask yourself, how little of money I need to put into this to get area rents? A local property manager would be a good member of your team too.