ARV practice: will you guys help me?

[Octavia D.]

ARV Practice, please help:

I'm still having a bit of issues on getting the formula right on this so that me and the end buyer will both profit from a deal after helping a seller. Since I'm wholesaling I was told there's no need for an inspection, these numbers are from a possible deal I've held info. on from a seller. As of now I believe the seller is still renting his property but might consider still selling it, regardless I want to focus on getting this ARV right, so could you guys tell me what I'm missing here.? Also how do you know what the average price range that a rehabber or end buyer will pay for.?

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Ask: $69k

bdrms: 3

baths: 2

Sqft.: 1,150

Sold comps. (6mnths): $98K - $189,900  ( View Here )

H.O.A: $200

Free & Clear (no mortgage)

ARV: $98k

x.60 = $58,800

x.70 = $68,600

x.75 = $73,500

- Repairs: $O (seller was fixing it up at the time)

- Profit: $10k

----- max offer(s) ----

= 1: $48,800

= 2: $58,600

= 3: $63,500

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I included all 3 possible numbers for each % and the max offer for them, does any of this work, or would it have been better if i used the other range of $189,900? Thanks so much guys for you're help.

[Albert Paul]

Hey Octavia, there is a basic formula I was taught to use to find the ARV which is:

Add the 3 highest comps in area

Divide them by 3 to equal ARV

ARV × .55(percent) to .70(percent) - repair costs(sqft×$7-$10) - $10k(your commission) = your offer

I learned this from Sean Terry's flip2freedom book and podcasts.

Not saying this is the best or only way but I haven't had any issues with buyers or sellers since implementing it! 

Remember, everyone has a bottom line number and you should too, you don't work FOR them you work WITH them, if there is no money to be made then it's not the deal you want to be in. 

Also, the best way to find out what the average price range is, is to ask for their price points, it cuts down on the guess work and makes better use of everyone's time, especially yours!

Also check out findcompsnow.com, a fellow member referred me to this site!

Hope this helps!