ARV

[Charles Richardson]

Whats the best website to determen the ARV?

[Mike H.]

@Heather Stewart

You don't need to pay for MLS to get access to the data you need.

There are two reasons you'll want to use MLS.
1) View listings of houses for sale.
2) View properties that have been sold.

In both scenarios, MLS access really isn't necessary. You can view mls listed properties on realtor.com. The only thing realtor.com is missing is some of the additional notes that listing agent may add. But one way to get that is to set up an alert with your realtor and let them send you all houses that fall within your target criteria.

i.e Send an email alert with any houses (either new listings or price changes) in county X or zip codes x, y and z, that are 3 bdrm, 1,000 sq ft or more, and priced at 150k or less. Thats pretty much the alert I have and it comes any time one of those things occurs. 

In terms of finding sold properties so you can use comps to determine the ARV, you can get those from realtor.com as well. Or a site like zillow. There are filters on zillow to show only sold properties. And you can filter even further.

My method is to enter the address of the house I'm looking at. Then I set the filters based on the criteria of the house. Houses that are SOLD in the last 12 mos. Square footage plus or minus 200 sq ft.  Age of the home plus or minus 20 or 30 years (the older the home the larger the plus/minus).

Then once zillow brings it up, I see how many sold homes I find. And zoom out to include more if needed. Or zoom in to narrow.  The nice thing is that its going to show you comps relative to the area your subject property is in.  There can be huge differences when searching for a comp in say, Bourbonnais, IL based on the subdivision. So seeing where the houses are at and trying to weigh the distance heavily is important.

Here's a real world example on how I'd estimate the ARV on one of my properties:

868 Edwin dr, bourbonnais, IL - 4bdrm/1.5bath, 1600 sq ft, built in 1970, on a crawl.

I would go to zillow and enter that address. Then I'd set the following filters
1) Listing type - Check SOLD only and uncheck all the rest (i.e. for sale, etc).
2) Home type - Houses only (uncheck the rest)
3) Under More filter - Square feet - 1,400 to ,1800
4) under More filter - Age - 1950 to 1990
5) Under More filter - Sold in last - 12 mos

From there I get the following comps within a block or two:
a) 4bdrm/1.5, 1750 sq ft - sold for 140k, built 1973
b) 3bdrm/1.5, 1400 sq ft - sold for 128k, built 1974
c) 3bdrm/1.5, 1480 sq ft - sold for 165k, built 1975

Thats still a little tight to reall get a sense of where it might be.
Initially that would suggest maybe 140k but then I zoom out to get some more comps. 

I pick up another one but we're still in the same subdivision and the square footage is spot on for this one so this is pretty good. But this one does have a much bigger lot:
d) 3/2, 1600 sq ft, sold for 155k, built 1978

Then I go out a little further and pick up what I'm sure are bank owned deals since they're at 100k or so and also one more good comp in the same subdivision.
e) 3/2, 1534 sq ft, sold for 153k, built 1990. 

But that one is newer.

So based on that, those are what I believe an appraiser would use for comps. I think the 128 and 165k are the outliers and that 140 to 155k seem to be the median price range. Then I look at the houses in the 150s and see that they each have a feature that would bump that price up (i.e. bigger lot, newer home).

I would then put my estimated ARV range on 868 edwin at 140k to 145k. And I would ask my hard money lender for a loan based on the lower number (i.e. 70% of 140k).

Thats how I calculate the ARV........