30 Day Wholesale Deal Analysis A Day

[Asad Malik]

12/26 Deal Analysis

I use Dealmachine to drive for dollars and on the road I came across a vacant property. Its been vacant so long it looks like a wildlife habitat. Absentee owner. I want to walk into every appointment with a MAO already in the back of my head but I dont trust my skills just yet. Any help is welcome. Torch me if you want - I can take it 🙃

So first, let me make sure I have my MAO math right:

1. 1. I Find after repair value
2. 2. I Multiply after repair value by .5
3. 3. I Subtract your my profit of $5,000 

That gives me my maximum allowable offer. Right? Here is where I need help: ARV.

I downloaded and read the document on calculating ARV from somewhere here. Since I dont have any agent friends and thus no access to the MLS, I am using Redfin to track down comps that are:

1. 1. sold in last 3 - 6 months
2. 2. within ½ - 2 miles
3. 3. within 10 years of age
4. 4. within 10% of square footage
5. 5. same number of bedrooms and bathrooms

Here is an abbreviated chart.

So far so good, right? 

Now here is where I run into problems: adjusting the ARV of recently sold properties to match that of my vacant subject property. The comps I am using are all in better condition than my subject property, so I have to bring the numbers of those comp properties down to match my subject property's condition. Heres the math I did to achieve that.

Based on the adjusted value of my 3 comps, the average price is $21,358. 

So if that average is my ARV, then my MAO would look like this...

21,358 *.5 - 5,000 = $5,679

I dont trust my skills yet, and I want to get good at this without using tools (for right now) so based on your experience do my numbers look accurate? I know real estate is local and price estimates vary wildly, but any insight or advice you could give would be more than welcome.