Attempting to BRRRR in Small Market w/ Poor Comps

[Brett McManus]

Hi BP, 

I have identified an up & coming submarket near my hometown with a clear increase in rental demand along with quite a few 2-4 unit multifamily properties with plenty of value add potential. The issue I am running into is although there are plenty of clear rental comps for fixed up properties, there are little to no fixed up sale comps to drive an ARV.

While home for the holidays I met with a few of the local investors who appear to be simply purchasing distressed duplex's, fixing them up, renting, and electing skip any refinance to maximize equity & cashflow. When looking at comps over the last 2-3 years I can clearly see the distressed purchase price, can see the rental listings that they are fixed up, but no sales comps for properties that have been rehabbed. 

Has anyone ran into this? Any advice on how to go about calculating ARV should I want to do a full BRRRR to keep my cash moving?

[Greg Scott]

Your best bet is to talk to a local appraiser who knows that market.