How to calculate the ARV without MLS - Newbie asssistance

Question

Hello,

Working on obtaining my first REI deal. My overall end goal is to invest through buy and hold/flipping deals, but to start out I am venturing into wholesaling. Around my neighborhood there are about 2-3 properties with for sale signs and for sale by owner. I have done a lot of research on the properties (market value, size, location) but have been stuck on giving an offer because I am a bit concerned about the ARV. Having a hard time (or maybe it's low confidence) figuring this out. I know what to do and how to calculate an asking price thereafter, but not knowing the ARV is holding me back. My main source for data has been Zillow and my counties public records (assessments and tax information). The values I take a look at between those two sources of data never are the same. Maybe I am using the information I find on those sites incorrectly? Or using the wrong values all together? If you have a certain process please let me know.

I have called some brokers/agents around the area who have told me that they have access to MLS, but I also have no idea what would I offer being a first time investor. Should I give them a cut of my wholesale fee? Give them referrals to the deals that I can't close on? Not sure what an agent would want or why anyone would work with a "newbie" just because. If you have any suggestions or comments that would help me to understand calculating this correctly, that would be greatly appreciated.

Thanks

David Michael · Answer

Good Afternoon Account Closed,

There are multiple ways to calculate the ARV for a property. The best option is the MLS. Unfortunately, Zilow  and the such are inaccurate. As an agent I have realized that from the feedback from my clients. If you are unable/don't want to get the license then team up with an agent and pay them to do the CMA. If you would like I can refer to you someone from my office that is great to work with.

Dave

Aaron Mazzrillo · Answer

Beg, borrow or bribe your way into MLS access. That is what you should be doing first. Redfin is good in my area, but I've seen it off by tens of thousands of dollars. No algorithm can take into consideration all the nuances of a house and the appeal of the location of said house - a purely emotional factor.

Jon Deavers · Answer

Account Closed

I'll agree with the input here that MLS access is key to an accurate ARV. Just having access though isn't enough, you need to have someone experienced in how to interpret the MLS data for it to be any more accurate than the syndicate sites (Zillow, Redfin, etc). Many agents (especially those with REO listing experience) will provide broker price opinions (BPO's) in exchange for a fee. This is the most effective and impartial way to get a solid ARV number. Usually it will be more cost effective than a full independent appraisal. I would suggest looking around your area for foreclosure (REO) listing agents and reach out to see if they would provide private BPO's and agree on a fair fee that makes sense for you and the agent. Best of luck!

David Michael · Answer

Account Closed,

I will reach out to see their specific area of expertise. If no one from my offcie can help I will refer you to someone else. Have no fear your in good hands ( unlike being with Allstate lol)

David Dachtera · Answer

Account Closed,

Any source of recent sales will allow you to make a best guess as a DIY "appraiser". These sources include Zillow, Redfin, Realtor.com and others. You won't actually get an appraisal or a CMA, but you can get a good idea of what's selling and for how much. You will need to make your own comparisons of square footage, home configuration and features, etc.

Having an agent on your team is quite helpful, especially if you can involve them in closings where they earn commissions to survive.

Ian Walsh · Answer

It is very hard to get an accurate ARV with out the MLS in my opinion.

Steve K. · Answer

Account Closed , I personally believe in doing my own analysis. I want to be confident of the ARV before I buy.

I have been a big fan of Redfin.com (not the computer algorithm estimates of value)....but just the ability to get email notifications in my market(s) for every new listing, change of status (sold, under contract, price reduction). I also like that I can directly see when the last time that house was sold. (i.e. if it was sold 6 months ago in ugly condition for $200k and is now fresh on the market with updates at $300k, I take note that this is a Fix-n-flip and I can learn from that other investor what works, and how nice it looks. Redfin also let me download a bunch of past sales data into Excel spreadsheets, if you're so inclined.

So, any source of active and past sales data (realtor.com) can help you estimate your ARV....but I don't like computer generated ones at Zillow or Refin.

After 4 years of investing, I got a realtor's license. Having "direct" access to MLS is helpful.....but not a make or break advantage.

Account Closed · Answer

@Steve K. Thank you for the input. I am working around Redfin as we speak. I am also a spreadsheet kind of guy so that I can see my data in a organized and listed format, so this may be a great tool. Thank you!

Account Closed · Answer

@Aaron Mazzrillo I just set up my first meeting with another investor/agent in my neighborhood. Hopefully I can sly my way into access across the area. Wish me luck!

Account Closed · Answer

@David Michael Please keep me in the loop! I would love to network with people who work within those markets.

Thanks!

How to calculate the ARV without MLS - Newbie asssistance

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